| The high profitability of China commercial bank has caused the publicconcerns. What are the real reasons that cause China commercial banks toobtain so high net profit? This thesis, through the analysis of commercialbank’s business outlook and its fundamental profit and loss accounts, selectsa series of profitability related ratio indexes as the objects of study, andestablishes a concise relation model between other indexes and ROA (Returnon Assets), what is set as the core indicator in the research.The thesis selects two countries groups for the comparative research ofnational commercial bank’s profitability related indexes, term by term, withChina. One countries group contains seven main developed countries, and theother one contains six economic transition countries. The research has covered more than ten profitability related indexes, including ROA, EquityMultiplier, ROE, Net Interest Spread, Net Interest Margin, Net Non-InterestIncome Ratio, Cost–to-Income Ratio, Net Income Margin, Interest-BearingAsset Ratio, Net Profit-to-GDP, Asset-to-GDP and Net Provision-to-Asset.The time spans of some indexes are more than thirty years.The research finds that the main reason leading to the higher profitabilityof China commercial bank is its higher ROA. And the higher ROA is mainlydue to its lower cost-to-income ratio and lower rates of asset impairmentcharges and provisions, next due to its relatively higher NIM (Net InterestMargin). In the process of comparative research, it is also found that Chinacommercial bank’s NIM level is lower than that of all economic transitioncountries generally, even lower than that of a few developed countries. Thatmeans attributing the high profit of China commercial bank to its high NIMonly is inadequate. In addition, the thesis also reveals that, besides the higherROA, the asset scale of China commercial bank, what is growing far fasterthan China GDP growth in years, is another reason for its high profit. Andthis is associated closely with China looser monetary policy obviously.In the end, the thesis looks ahead at the prospect of China commercialbank profitability and makes the recommendations for its development,according to the commercial bank ROAconcise relation model what is established in the thesis. The thesis also points out that the ROAconcisemodel can be used as not only a predictive model for commercial bank’sROA, but also a tool of strategy routing for commercial bank development. |
