The Study On The Competitiveness Of Commercial Banks From Financial Perspective

Finance is essential to modern economy. The rapid development of Chinese economymust have strong financial markets backed. Chinese financial issues are largely bank issues.Compared to foreign banks, the competitiveness of Chinese commercial banks are generallyunsatisfactory. Since2012, China issued a document to accelerate the implementation of the“New Basel Agreement” aiming to strengthen Chinese commercial banking system. Bankreform should start from the study of the level of Chinese commercial banks’ competitiveness.Chinese commercial banks are confronted with new challenges in profitability and riskmanagement. Therefore, the study of the level of competitiveness of the commercial banks inChina and the evaluation of its influencing factors has no doubt a good theoretical andpractical significance.In the empirical part, the study analyzes those representative data selected from13commercial banks from earnings, liquidity and security perspective as well as evaluate theirinfluencing factors. The empirical analysis results show that: foreign bank, HSBC, ranks first.Small and medium-sized commercial banks, for example: China Merchants Bank andShanghai Pudong Development Bank show a better level of competitiveness compared to thebiggest four state-owned banks. In terms of profitability, China Merchants Bank does best. Interms of liquidity, China Citic Bank does best. In terms of security, HSBC ranks first.Besides, Chinese commercial banks mainly do poor performance of the following thereindicators: liquidity ratio, capital adequacy and NPL ratio. There are there main reasons forthat. Firstly, Chinese commercial banks’ profits mainly rely on interest income. Secondly,intermediate business keeps stalled. Finally, the level of risk management control stays low.Therefore, Chinese commercial banks should improve their level of competitiveness fromseveral directions we talked above. At last, a series of targeted measures are recommended according to the results of the evaluation of commercial banks’ competitiveness.