Research On The Impact Of Non-interest Income On The Effciency Of Listed Commercial Banks In China

Along with the increasing of foreign banks and the process of financial disinter-mediation,the market-oriented reform of interest rates has been basically completed.Domestic banking industry has entered in a new era that filled with challenges with the rapid development of Internet financial as well as the introduction of deposit insurance system.Under the combined action of these factors,the spreads of commercial banks have been narrowed,and the banks gradually realized it is urgent to adjust the income structure as well as the profit model.In recent years,domestic commercial banks have actively adopted various strategies to broaden the source of incomes,including the non-interest income,has been valued by commercial banks as another main source of incomes,and developing the non-interest income business is becoming an important way to transform the banks profit model.However,though scholars both at home and abroad studied from the point of view of performance and risk,whether non-interest income business has a promoting effect to improve efficiency of listed commercial Banks in China,there is still no a consistent conclusion.In view of this,this paper takes domestic16 listed commercial Banks as the research sample,study the non-interest income's influence on the efficiency of listed commercial Banks in China,then provide some policy recommendations to improve the efficiency of domestic listed commercial banks.This paper has been divided into four parts.The first part is the theoretical analysis,firstly summary and review the research achievements of domestic and foreign scholars.And the first part is based on the results of previous studies.It redefines the non-interest income and the bank efficiency in this paper,points out that the non interest income includes net fee and commission income,net foreign exchange income,net fair value changes income,net investment income and other net operating income.Metafrontier technical efficiency is the micro efficiency and when being used to measure efficiency,the definition of output variables include pr-tax profit and non-performing loans,which make the measurement of technical efficiency can also reflect the two dimensions of bank performance and risk.In addition,the theoretical analysis of non-interest income on bank efficiency is also introduced.The second part analyzes the current situation of the development of non-interest income,and make use of SBM-Undesirable model to measure the metafrontier technical efficiency of listed commercial Banks in China,found the average development level of non-interest income of state-owned commercial Banks are higher than non-state-owned commercial Banks.But the average efficiency of state-owned commercial Banks are lower than non-state-owned commercial Banks.The third part has chosen 16 listed commercial Banks in China from 2008 to 2014 as the research sample to study how the non-interest income and its components affect bank metafrontier technical efficiency.First of all,with 16 listed commercial Banks as sample,the non-interest income squared is added when building the empirical regression model,and take the gross domestic product(GDP)growth rate,market concentration,capital adequacy ratio,cost income ratio as controlling variable to test whether the "threshold effect" exist between non-interest income of commercial Banks and metafrontier technical efficiency,and different types of banks is completely different.Therefore conclusions are as follows.The first,the relationship between non-interest income and metafrontier technical efficiency significantly manifested inverted u-shape.The second,the relationship between non-interest income of state-owned Banks and banks metafrontier technical efficiency is significantly inverted u-shaped relationship,the u-shaped relationship between non-state-owned commercial banks' non-interest income and metafrontier technical efficiency is not significant,but generally presents a tendency of positive correlation.The third,through the linear test,which the regression of accounted squared model excluding non-interest income is made to further confirmed that the u-shaped relationship between non-interest income and metafrontier technical efficiency is mainly caused by state-owned commercial banks.This may due to the higher ratio of non-interest income in state-owned commercial banks,while the non-state-owned commercial banks' ratio is relatively lower in the midst of the inverted u-shaped curve of rising stage.The last,when study the impact of component of non-interest incomes on the metafrontier technical efficiency of the bank,the u-shaped relationship between the fee incomes and the bank metafrontier technical efficiency is significant.Net investment profit,exchange net income and net income and other business are positively correlated with the bank metafrontier technical efficiency,but the relationships are not particularly significant.The fourth part puts forward some policy suggestions.Firstly,compared to and non-state-owned commercial banks,the state-owned commercial banks should control the cost when developing non-interest income business.Secondly,the internal structure of non-interest income should be adjusted.Thirdly,strengthen risk management and cost controlling.Fourthly,product innovation,service innovation should be done to build bank brand.Lastly,introduce talents and improve the personnel training mechanism.