Research On The Influencing Factors Of Profitability Of Hebei City Commercial Bank Based On Fixed Effect Model

The market research and development prospects analysis report of China City Commercial Bank in 2016 pointed out that China City Commercial Banks have made positive progress in the areas of deepening reform and transformation such as serving the real economy,preventing against financial risks and strengthening internal controls,its rapid growth rate reflects better development trend and strong development potential.We also have to face one problem simultaneously.Parts of China's city commercial banks still have weak links which affect the raising of their profitability.City commercial banks aim to serve the local economy,serve small and medium enterprises and serve city residents.Improving profitability can not only ensure its own sustained and stable development,but also promote the improvement of social benefits.Hebei Province,as the core area of the Bohai Sea Economic Zone,promoting the development of city commercial banks and improving their profitability vigorously not only can fully support the development of Hebei's real economy,but also has a positive effect on the economic growth of the Bohai Sea Economic Zone.However,their risk control ability is weaker,their costs are higher,their nonperforming loan rate is higher.These problems affect the increasing of Hebei City Commercial Bank's profitability seriously.At present,there are many researches on the influencing factors of city commercial banks' profitability based on nationwide,but the research for an area is only a few,although the research on taking the whole city commercial banks as a sample has some guiding significance,but the pertinence is not strong.Therefore,this article takes Hebei city commercial banks as samples and research their influencing factors of profitability.First,we define the concept of city commercial bank and profitability of city commercial bank,expound the relevant theory.Secondly,we describe the development of Hebei city banks and point out the problems in the process of development are profitability decline,credit risk,liquidity risk,low operating efficiency and so on,then we explore the impact of various factors on the profitability from macroeconomic environment and the bank's own factors two aspects.Furthermore,on the basis of the research hypothesis,the panel data model is used to analyze the factors that affect the profitability of Hebei city banks.We choose Fixed effect model after the F-test,Hausman test,eliminating the heteroscedasticity,Also,the research hypotheses are verified,the conclusion is that the market share,liquidity,macroeconomic environment,bank size and risk resistance have positive effect on the profitability of Hebei City Commercial Bank,and the market share has the greatest impact.The impact of loan ratio and cost income on the profitability of Hebei City Commercial Bank is negative,and the impact of non-performing loan ratio is larger.Finally,according to the empirical results,we put forward relevant recommendations of enhancing Hebei City banks' profitability from some aspects.They are increasing market share,enhancing the ability to resist risks and improving operational efficiency and promoting the innovation ability and so on.