An Empirical Analysis Of The Profitability Of Chinese Commercial Banks

With the advance of the market-oriented reform of interest rate in China, interest rate controls, except the deposit rate, have been fully liberalized at present and the upper limit of the floating range on deposit rate continued to expand, now at 1.5 times the benchmark deposit rate. Marketization of interest rates not only significantly expand the independent pricing space, but also makes the level of profitability of banks quietly changed. In recent years, attributed to combined influence of China’s economic restructuring, deepen financial market reform, the rise of the Internet and other financial products, banking financial has gradually become a hard weapon of commercial bank to against fierce industry competition for deposits, and to adjust the business structure under the rate marketization. Meanwhile, in the case of narrowed interest spreads of deposit and loan, the income of banking financial has also become a new profit growth point of commercial banks.This paper, on the basis of domestic and foreign research achievements about the market interest rate, bank financial products and profitability, is to illustrate the analysis of financial products sales and profitability in 2005 to 2014 of China’s 16 listed banks. In the part of empirical research, this paper selects the financial data of 9 listed banks in 2009 to 2014 as the sample. First, the analysis is on emphasize of bank net interest income and financing business income’s influence to commercial banks operating profit. Then it’s followed by to further explore the effect of bank financing business income to our country commercial bank profitability. In the panel regression model which introduced the operating expense ratio, total asset growth rate, gross domestic product growth rate as explanatory variables, it takes a comparative analysis of two sample groups of listed banks and joint-stock commercial banks, whose data show the difference of profit ability and influence to commercial banks. In the end, the conclusion and suggestion of this paper are drawn from the analysis of theoretical research and empirical analysis.The conclusion of this paper is financial business development is conductive to promoting the process of interest rate marketization in China, is conductive to improve the business structure of commercial banks, so as to enhance the level of bank profitability. While in our country net interest income of commercial bank’s operating income accounted for the ratio showed a downward trend year by year, banks have begun to change their traditional profit model. In the part of empirical research, this paper draws the conclusion that financing business income pushes high efficiency to improve the profitability of the commercial banks. And it shows higher effect to bank profitability among commercial banks than that of all listed banks in the sample group results, also profitability is influenced by operating expenses rate, total assets growth rate and GDP growth rate as well. The proposal of this paper is to actively carry out financial innovation, to reasonable control of the size of assets and to strengthen the management of operating expenses, so as to improve the profitability of commercial banks.