Analysis Of City Commercial Banks’ Profitability Based On R Software

In the 1980 s, China’s commercial banks have emerged because of the impact of the financial liberalization, electronic and information technology. Commercial banks continue to grow and regulate development while financial system developing. At the same time city commercial banks are restructured from urban credit cooperatives in the new image into the financial sector.According to the appearance of foreign banks, the Internet enterprise, the private banks and interest rate market-oriented, it is important to improve the commercial banks’ competitiveness to maintain sustainable development. In the fierce competition, increasing the bank profit may keep the bank developing. The city commercial bank is the important component of China banking. They are special groups. Faced with state-owned commercial banks, joint-stock commercial banks and foreign bank, city commercial banks are being put in a more difficult situation. One of difficult problems to the policy-makers is how to be outstanding in the banking sector. Thus, do the bank operating profit research is with its own features.Bank operating profit is usually measured by profitability. Bank operating principles are profitability, liquidity, security and growth. They are to strengthen risk prevention and control of city commercial banks. They are also the principles to increase the bank operating profit and enhance overall competitiveness. To discover more rules and the effect on bank profitability, can support the policy-makers to improve operating profits and competitiveness.Data Mining can help us find out the relationship among the various factors which affecting to operation profit of city commercial banks. Also, it can explore the issues what should be paid attention to when make the discussion. This paper uses R software to analyses the operation data of 16 city commercial banks. R is open and free. It has extensive and powerful analytic abilities and graphics abilities. In this paper, firstly, we use multiple regression analysis to select indicators which are significantly associated to profitability. Then, we establish a multiple liner regression model. Secondly, we classify the data into two parts, and use association rules mining to find out if any rules between them. After the study, the loan deposit ratio, liquidity ratio, capital adequacy ratio and increase rate of deposit have a more significant impact on the city commercial bank profitability.