Research Of Transformations Of Listed Commercial Banks Based On Interest Rate Liberalization

With the progress of the interest rate liberalization, the profit model ofChina’s commercial banks, which relies on deposit and loan spreads, ischallenged, resulting in lower revenue growth and declining interest income.Through empirical analysis, this thesis shows that the impact of interest rateson commercial banks and comes out that: firstly, the smaller the scale ofcommercial banks, the greater the influence of interest rate liberalization.Second, small and medium commercial banks are more innovative than largecommercial banks. Third, large commercial banks are more capable ofimproving non-interest income.The thesis provides transformation suggestions from the perspective ofboth balance sheet and strategic development. In respect of balance sheet,analysis lies on assets, liabilities and off-balance sheet, which includesreducing the proportion of credit assets, tilting resources to retail customers,adjusting liability structure to reduce the proportion of general deposits, andimproving commercial banks’ non-interest income, in response to thedownward pressure on interest income. In respect of strategic development,the analysis based primarily on the scale of commercial banks, which dividescommercial banks into large banks, medium-sized banks and small banks.Large banks should make the best of its advantages on integrated andinternational operations. Medium-sized banks should focus on specific services, professional development and creative business. Small banks shouldpay attention to small and micro, community-based local development.