Determinants Of Investment Bank Profitability Post The Financial Crisis

As one of the core system of the modern financial system,The investment bank can provide basic services for a variety of companies,organizations,government,other financial services and related securities investment activities in the financial advisory,mergers and acquisitions,securities financing,securities investment funds,financial products sales generation and risk management of derivative services.With its extremely high efficiency,the investment bank has the obvious superiority in servicing entity economy in our country,and plays a vital role in the financial intermediation.However,For China's investment banking's development and profitability impact factor related research is relatively small,the development of investment banking in China is relatively extensive,which to some extent hinder the investment bank to better serve the entity economy in China.As one of the global financial centers,the investment banks in the UK are in the leading position in the world.In this context,the author of this paper will provide guidance for the development of China's investment bank through the study of the British investment bank..This paper is based on the research of many scholars at home and abroad.Combined with the characteristics of the investment banking industry in the UK,The significance of this study can be summarized as the following three points:First:since the global financial crisis(2007-2008 years),the investment bank industry has entered a new stage of development,compared with the pre-crisis stage,The driving forces of the profitability of investment banks have undergone major changes,An accurate and comprehensive study of the factors that affect the profitability of investment banks can encourage investment banks to study new strategies to achieve outstanding performance in a changing environment;Second:This study is important for the establishment of an stable,efficient and high-quality investment banking environment for the investment banking industry.Third:A large number of previous research literature on investment banks focuse on the U.S.investment bank,the British investment bank research literature is relatively small,which does not match the global financial position of the United Kingdom.Britain has the most active financial markets in Europe.In 2014,London becomes the world's largest financial center once again,therefore,Studying the influence of the profitability of British investment bank,can provide directive suggestions for the development of China's investment bank.In this paper,we take a sample of 17 representative investment banks in the UK to explore the determinants of the profitability of investment banks after the financial crisis in the period of 2009-2014.In this paper,we combine the quantitative research methods and qualitative research methods.Through the regression analysis with random utility model,We can get the influence factors of the profitability of UK investment banks after the financial crisis.In this paper,the factors influence the profitability of investment banks include:Macroeconomic factors,Financial market structure factors and The bank's own factors,among these factors,some factors have not been considered in previous studies,we can find that,compared to the macroeconomic variables and financial market structure variables The bank's own variables has more significant influence on the dependent variable,the regression results show that macroeconomic variables and financial market structure variables have no significant influence on the dependent variable according to the regression results.This is very different from our previous expectation,We can find the difference of the influence factors of investment banks profitability after financial crisis.Bank Size(GM),Equity to asset ratio(QYZC),Cost to income ratio(CBSR)and Liquid asset to total asset ratio(LDZC)showed significant influence on the dependent variables.Discussion on the influence of related factors after the crisis on the profitability of the investment bank enables us to understand how to achieve the sustainable growth of investment bank profits after the financial crisis,and provide practical suggestions for the development of China's investment banks in the future.