A Study On The Performance Of Commercial Bank Lending Orientation In China

At present,resolving excess production capacity is one of China’s main economic goals.China’s commercial banks tend to follow the government’s industry policies and make a large percentage of loans to customers in key areas and hot industries.The excessive concentration of bank credit may not only hinder bank’s micro performance;it also impacts the real economy.In this paper,the micro and macro performance of commercial bank credit are unified in a research framework.In particular terms,the dual effect of credit concentration on performance is discussed from the perspective of manufacturing overcapacity.The results of the study will provide some reference for the adjustment of commercial banks’ credit allocation.This paper focuses on the question of whether China’s commercial banks’ arrangements for loans take into account both micro and macro performance.On the basis of summarizing the research on the structure of loan orientation,this paper explains the causes of credit concentration based on Expectation Theory,theory of Comparative Advantage,the effect of Sheep Flock;et al.According to the theory of portfolio,the article illustrates the mechanism of credit concentration on the bank’s micro performance.Next,the formation mechanism of fallacy of loan composition is expounded in the thesis.Then,this paper describes the current status of loan structure from three aspects—industrial distribution,regional distribution and customer structure.On the basis of the theoretical and existing status analyses,the paper establishes four fixed effect models with the annual financial data sample of the 29 domestic commercial banks from 2000 to 2015,to check the impact of industry structure,regional structure and customer structure of loan orientation on nonperforming loan rate(hereafter referred to as NPL rate),which represents bank’s micro performance.Based on the panel data of 28 manufactory sub-sectors,the DEA-tobit model is established to estimate the effect of domestic bank lending on the degree of industrial capacity utilization,which represents the macro performance of the commercial bank.The results show that the impact of credit customer concentration on bank’s NPL rate is positive.Statistical results also suggest the existence of a U-shaped relationship between credit industry concentration and NPL rate;at present,the overall degree of credit industry concentration of China’ commercial banks is located on the left side of the U-shaped curve,which means the impact of credit industry concentration on bank’s NPL rate is negative.And the empirical research also shows that excess supply of credit resource is an important factor that causes excess production capacity.Combined with the former results,this paper shows the existence of fallacy of composition in credit industrial distribution.Although credit industry concentration contributes to improving bank’s micro performance,it tends to neglect the macro performance of industry capacity utilization to a certain extent.Finally,based on the conclusion,this article puts forward some suggestions,such as establishing the industrial risk evaluation system,strengthening corporate governance,perfecting personal banks’information disclosure,enriching macro information,and strengthening communication between relevant regulatory authorities.