Research On The Sustainability Of Agricultural Loans Of Commercial Banks

Forty years of reform and opening up,China's economic development has progressed steadily,and it is imperative to narrow the gap between the rich and the poor in rural and urban areas.The Party's 19 th National Congress report clearly defines the rural revitalization strategy as the country's basic strategy,realizing the rapid development of the rural economy,and promoting the country's overall economy.As a core force in the financial field,commercial banks have played a role in fueling the entire financial sector and the economy.On the one hand,commercial banks must actively respond to the national strategy,take actions to drive rural economic development,and contribute to the development of rural economy;on the other hand,commercial banks should pay attention to the basic situation of their own agriculture-related loan business,timely control risks,prevent risks,and create business in order to create sustainable development of bank-related agricultural loan business.The sustainable development of agriculture-related loans is the premise and purpose of commercial banks to fulfill their social responsibilities.The road to sustainable development is the necessary way for commercial banks.It not only responds to the call of the state,but also increases the investment of financial capital in the rural economy.It can also regulate the issuance process of commercial banks' agricultural loans and meet the regulatory requirements.It is also conducive to enhancing the core competitiveness of the borrowing companies and broadening the sources of funds.As one of the five large commercial banks,agriculture-related loan is the core business of Agricultural Bank of China.However,compared with the other four large commercial banks,the Agricultural Bank of China's non-performing loan ratio for agriculture-related loans is higher.Under the unavoidable social responsibility and strategic requirements,it is necessary to pay attention to the sustainable development of China Agricultural Bank's agriculture-related loan business.The sustainability referred to in this paper is financial sustainability.The realization of the agriculturerelated loan business can not only meet the needs of borrowers,but also make the financial indicators meet the regulatory standards.This also means the long-term development of agriculture-related loans,which makes the agriculture-related loan business and other businesses jointly promote the steady development of commercial banks,achieving a steady increase in the total amount of loans,reasonable optimization of loan structure,and excellent loan quality.This paper considers the agriculture-related loan business of the Agricultural Bank of China from three perspectives.The first is security.The selected indicators include capital adequacy ratio,non-performing loan ratio,and provision coverage ratio.The Agricultural Bank of China should put safety first.The second is liquidity.The selected indicators are loan-to-deposit ratio and liquidity indicators,and strengthen liquidity management.Finally,profitability,the selected indicators are ROE,operating profit growth rate,net interest spread,cost-to-income ratio,non-interest income ratio,total asset growth rate.Agricultural Bank of China pursues maximum profit while ensuring safety and liquidity.Profit is one of the business objectives.According to these three characteristics,collecting data related to agricultural loans of Agricultural Bank of China,using factor analysis method to construct a comprehensive scoring model,and calculating the score by the annual data of Agricultural Bank of China.According to these three characteristics,collect data related to agricultural loans of Agricultural Bank of China,and use factor analysis to construct a comprehensive scoring model.The annual scores of the Agricultural Bank of China are used to calculate the scores.Firstly,the paper summarizes the sustainability of China Agricultural Bank's agriculture-related loan business from the overall score,and then analyzes the indicators that can reflect these three characteristics,and conducts a comprehensive and in-depth discussion on the sustainability of China Agricultural Bank's agriculturerelated loans.Finally,this paper proposes feasible suggestions for the sustainable development of China Agricultural Bank's agriculture-related loans from the perspectives of business performance,risk management,and capital structure optimization,such as innovative financial products,strengthening loan process supervision,and increasing intermediary business income.