Determinants Of Non-performing Bank Loans In China

The non-performing loan ratio has always been closely watched by banks and regulatory agencies.It is not only an important indicator for evaluating the security status of bank credit assets,but also an important indicator for measuring the competitiveness of commercial banks in the context of the gradual opening of the financial industry to the international community.The non-performing loan ratio not only relates to the competitiveness of banks,but also relates to the security of the social credit system and the national economy.The non-performing loans of commercial banks in China have been greatly improved in the past decade or so.After major state-owned banks experienced asset stripping,the rate of non-performing loans dropped sharply.In 2012,the non-performing loan ratio of commercial banks in China fell to a minimum of 0.95%.The non-performing loan ratio has rebounded and remained within the range of 1.5%-2.0%.However,there are more signs that commercial banks' non-performing loan issues need full attention.First,the number of non-performing loans in China is large,and the number of non-performing loans in some provinces is huge.According to the data released by the local banking regulatory bureaus,it can be found that the current non-performing loan rate base in the eastern part of China is large,while in some western provinces,the rate of non-performing loans has increased substantially.Loans in some regions the risk is still not fully exposed.Second,from the perspective of the domestic economic environment,China's economic growth rate is declining.The economy urgently needs to adjust structural and steady growth.In this critical period,the improvement in the non-performing loan ratio will help maintain the normal operation of the credit system and improve the ability of banks to provide capital to the real economy;Third,at present,China's financial institutions are in the process of internationalization,and the level of bank credit risk management is still different from that of developed countries.Although the bank's financial strength is among the highest in the world,it is competitive in other areas.For example,the efficiency of capital utilization,ability to withstand risks,and liquidity level have yet to be improved.In order to change the current situation of non-performing loans in China,it is necessary to explore the formation mechanism and influencing factors of non-performing loans.Studying the influencing factors of non-performing loans from the perspective of bank competitiveness can help to find the main influencing factors of commercial bank non-performing loans,establish a complete set of credit risk prevention system,and also improve the credit risk of commercial banks under the condition of stable and controllable credit risk.The international competitiveness.In this paper,based on the study of the influence factors of non-performing loans by many scholars,combined with the relevant theories of the competitiveness of commercial banks,through theoretical analysis,it is believed that some factors of bank competitiveness can explain the impact of non-performing loans,and a detailed analysis of its impact mechanism.Then in the empirical part,this paper takes 26 domestic commercial banks as the research object,according to the theoretical analysis part of the assumptions and referring to the study of Borio,Zhu(2008)and others to construct two models in order to find the most significant influencing factors of non-performing loan ratio.The empirical results show that the banking competitiveness index selected in this paper has a significant impact on the non-performing loan ratio of commercial banks.Among them,the return on assets contributes most to the change in the non-performing loan ratio,which is the most critical indicator affecting the non-performing loan ratio.Based on the empirical conclusions,this article gives policy recommendations in the perspective of the competitiveness of the major commercial banks in Chapter 5.For commercial banks,strengthening macroeconomic forecasting and analysis to improve risk management,operational efficiency and risk management,reducing the ratio of state-owned capital and introducing private capital,these measures will make commercial banks better at reducing bad loan rates.Improve your competitiveness.