| Since the joint-stock system reform of state-owned banks started in the eighties of the last century, China’s commercial banks has gone through government injection, the introduction of domestic and foreign strategic investors, reorganized public offering and a series of profound and dramatic change, and then gradually formed a modern commercial bank management mechanism. With the help of the rapid development of the national economy, the profitability of China’s commercial banks, especially China’s listed commercial banks has been climbing in recent two decades. And they constantly refresh their rankings in the global banking competitions. However, with the development and prosperity of capital market, the investment and financing concept of business sector and residents has undergone tremendous changes, China is seeing a financial disintermediation phenomenon. Under the pressure of financial disintermediation, whether China’s listed commercial banks can continue to maintain high growth trend and how to further enhance its profitability in the future competition are important issues to be studied in depth. Based on the review of relevant literature of financial disintermediation and commercial banks profitability, this article extracts the theory of financial intermediation, financial disintermediation and bank profitability theory as the theoretical support, and then analyzes the current development of China’s financial disintermediation and profitability situation of China’s listed commercial banks. Next we theoretically combed the macro and micro factors which affect the profitability of listed commercial banks as bases of the following empirical research. In the part of empirical study, we selected 16 major China’s commercial banks and their financial data from 2004 to 2013 as the samples. ROAA(return on average assets) was chose as the evaluation indicator of profitability and the ratio of equity and bond financing scale to the social financing scale was chose as an alternative indicator to measure the degree of financial disintermediation. Macroscopically, we also consider the impact of factors such as GDP and inflation. From the microscopic view of commercial banks, we consider the factors of bank management and operations, risk prevention and control and revenue structure. Respectively, the size of assets, cost to income ratio, capital adequacy ratio, non-performing loan ratio, deposit growth and net fee and commission income ratio were selected as control variables. Based on the above variables, we build a profitability evaluation model of China’s listed commercial banks. The regression results of panel data show that China’s financial disintermediation has a positive influence on profitability of commercial banks. This is partly due to the degree of China’s financial disintermediation yet is light, and another reason is that China’s commercial banks has taken a more positive measures to cope with the financial disintermediation. The empirical results also show that the cost to income ratio, non-performing loan ratio and the proportion of fee and commission income has a significant impact on profitability. Therefore, it is essential to take measures to improve operational efficiency and asset quality and expand the intermediate business income for enhancing China’s listed commercial banks profitability. Finally, the article gives some corresponding suggestions to deal with the financial disintermediation trend deepen and to improve the profitability of China’s listed commercial banks. |
