Research On The Impact Of Non-Interest Income And Structure On The Profitability Of Commercial Banks

Under the background of the marketization of interest rate,the development of Internet Finance and the deepening of financial disintermediation,the interest margin between deposits and loans of commercial banks is shrinking,and the income of traditional credit business is shrinking.In order to maintain profits,commercial banks must find new sources of income.The transformation of commercial banks is imminent.Whether non-interest business can help commercial banks to transform and improve their profitability,become a new revenue growth point of commercial banks,is the focus of this paper.On the basis of summarizing the existing domestic and foreign research on non-interest income,this paper first expounds the concept and characteristics of non-interest income,then summarizes the theoretical basis of the impact of non-interest income on the profitability of commercial banks,then summarizes the current situation of the development of non-interest income of commercial banks in China,and compares the differences between the development of non-interest income of Chinese and American commercial banks.Finally,empirical analysis is carried out,using the panel data of 30 listed commercial banks in China from 2008 to 2017,a fixed effect model is established to examine the impact of non-interest income and its components on the profitability of commercial banks.Sample banks are divided into two categories and tested comparatively.The following conclusions are drawn:(1)For all sample banks,the increase of the overall proportion of non-interest income can effectively improve the profitability of commercial banks.Among them,the increase in the proportion of non-interest income of national commercial banks can significantly improve their profitability,while for urban commercial banks,the impact of non-interest income is not significant.(2)For all sample banks,the increase of the proportion of fees and commission income and investment income can significantly improve the profitability of commercial banks.The regression results of exchange gains and losses and changes in fair value are not significant.The increase of the proportion of other business income will not bring about the improvement of profitability,but will lead to the decline of the profitability of commercial banks.(3)For national commercial banks,the increase of the proportion of fees and commission income can significantly improve their profitability,while the increase of other business income will reduce their profitability;for urban commercial banks,the increase of the proportion of investment income can significantly improve their profitability.Finally,according to the above theoretical analysis and empirical conclusions,this paper puts forward policy suggestions.This paper argues that commercial banks can optimize the development of non-interest business and improve the profitability of commercial banks by optimizing the internal structure of non-interest business,differentiating various types of banks to develop non-interest business,improving financial innovation strength and improving the banking system and mechanism.