China's Listed Commercial Bank Earnings Impact Factors

Commercial banks in the financial system,an important part is the most important indirect financing agency,occupies an important position in China's economic life,and therefore the quality of the commercial banks operating conditions,and is directly related to China's economic development and social stability.Impact of recent years,with the deepening of China's opening up,slowing GDP growth,the introduction of Basel II,the deepening of the reform of the interest rate market and other factors,the profitability of commercial banks has been a great blow.Our model is based on the profitability of commercial banks net interest margin as the main source of profits,interest income from lending business has become the main source of income,but as interest rates continue to promote market-oriented reform,beginning in the third quarter of 2013 loan interest rates have full liberalization of deposit rates of reforms already underway.For China's commercial banks,commercial bank deposits is the basis of doing business,so the banks to compete for deposits,deposit rates after liberalization will certainly compete to raise deposit interest rates,which would make the cost of commercial bank deposits increased,net interest margin income narrow,lead to a decline of its profitability.This paper first reviews the relevant literature at home and abroad,and draw relevant experience and methods,factors affecting the profitability of commercial banks and then analyzed theoretically;then analyzes the development of China's listed commercial banks at this stage of the drivers of commercial bank profitability analysis,interest rate reform impact on the profitability of commercial banks.Learn from previous studies,selected the 16 commercial banks listed as a sample,select the return on assets(ROA)as the dependent variable,and chose to measure the size of commercial banks,commercial banks,savings and loan business,risk control,management efficiency,intermediary business,the tax burden related indicators as explanatory variables in the empirical analysis.This article focuses mainly on the empirical analysis of factors affecting the profitability of commercial banks,selected balance balanced panel data 2007-2013 panel data and third quarter of 2011 to the third quarter of 2014 regression analysis.In the second model added a dummy variable DUM,mainly in order to measure the impact of the implementation of China's commercial banks earnings after the market interest rate policy.The empirical results show that the ability of commercial banks deposit and loan business,the ability to control risk,operating efficiencies,intermediary business,the tax burden,the impact on GDP growth in commercial bank profitability is significant;dummies DUM and ROE(ROA)was among a significant negative correlation,confirming the interest rate liberalization,resulting in a narrowing of the difference between deposits and loans,commercial banks' profitability adversely affected.First,the current loan interest rate hasbeen fully liberalized,followed by the liberalization of interest rates on deposits;second,with the further opening of China's financial sector,the gradual loosening of financial regulation,there will be an increasing number of foreign banks,private banks enter;third,the rise of the Internet and the rapid development of finance to commercial banks had an impact and pressure.Faced with these challenges,the commercial banks must change the traditional profit model,changes in business philosophy.Accordingly,this paper presents the results to be diversified business model,improve operational efficiency,vigorously develop intermediary business,improve risk management of commercial banks,savings and loan business improved,reasonably control the size of banks and other proposals.