Research On Transformation Of Chinese Commercial Bank's Profit Model

The GDP growth rate of China is 6.7% in 2016,reduced for 6 consecutive years.The removal of the deposit rate limit in 2015 marked the completion of the interest rate liberalization.The government liberalizes the control of interest rates,and the interest rate is determined by the market.The result of the above changes is that the interest on loans and loans is getting smaller.It affects the bank deposit and loan business.At the same time the maturity of information technology makes the rapid development of Internet finance.It seizes customers and resources and the result is the capital market competition is more and more intense.And the single business type of bank is difficult to meet the diverse needs of customers.All of the above affects the profitability of the bank.It has become a problem that banks need to solve at present.This paper first analyzes the existing research literature on the profit model transformation of commercial banks,including domestic and foreign.The purpose is finding the type of the profit model and studying the business structure so that we can provide some suggestions for the transition of the profit model.Then we analyze the profit model of China's commercial banks.The conclusion is that the interest income is still the main source of banks in China.The income of intermediary business is very small.This profit model is difficult to adapt the economic environment of China.The banks can't continue to develop if we don't change the profit model.We should learn from the experience of foreign banks and balance the credit and intermediary business.Banks should control the size of the credit business,pay attention to the development of intermediary business and change the single business structure.Finally,the paper analyzes the influence of credit business and intermediary business income on profitability by empirical analysis to test whether the above theoretical analysis is correct.This paper chooses the financial data from 2005 to 2015 of 14 commercial banks listed in Shenzhen and Shanghai Stock Exchange as samples and establishes a fixed effect model.The explained variable of model is ROA.The explanatory variable are NIIM and IBIM.The controlled variables are CAR,PAR and so on.The paper compares the effects of interest income and intermediate business income on bank profits.The conclusion is that intermediate business has a greater impact on bank profitability than traditional credit business.This also shows that the bank equilibrium credit business and intermediary business is correct.According to the above theoretical analysis and empirical analysis,the banks of China should control the scale of credit business,focus on the development of intermediary business,segment the type of customer and utilize information technology to control bank costs.