Diversification,Loan Quality And Performance Of Rural Commercial Banks

In recent years,with the continuous acceleration of the world's financial liberalization and the increasing financial reforms,the traditional core business of the banking industry,namely the deposit and loan business,has no obvious advantage,and the bank's deposit-loan spread has gradually narrowed.Based on this,the domestic banking industry has gradually opened up a diversified business development model,actively researching and developing financial products,expanding financial business,increasing profit sources,exploring new ways to improve efficiency,and improving its overall performance level.How diversified management affects bank performance has always been the focus of scholars at home and abroad.In a sense,strengthening the degree of diversifi cation can effectively improve the performance of rural commercial banks.The existing literature research mainly focuses on the direct impact of diversification on the performance of rural commercial banks,and there are few studies on the ways in which diversified operations affect the performance of rural commercial banks.China is a big agricultural country,and the government is continuing to strengthen the emphasis on the issue of agriculture,rural areas and farmers.Rural economic development has become an important task for national development.The development of the economy requires the strong support of finance.In China,rural commercial banks are important financial institutions in rural areas,providing major financial resources for rural areas and playing an important role in the development of our country's agriculture and rural economy.At present,the main asset business of rural commercial banks is still the traditional credit loan business,and its loans still dominate.Therefore,this paper introduces loan quality as a mediator variable to empirically study the impact of diversification on the performance relevance of rural commercial banks.Firstly,based on the related literature review and the theories of economies of scale,scope economy and defensive hypothesis,this paper analyzes the impact mechanism of diversification on the performance of rural commercial banks,and the impact of loan quality on the performance of rural commercial banks in diversified operations.Based on the mechanism of mediation,the research hypothesis of th is paper is proposed and the test model is constructed.Secondly,using the sample data of 43 rural commercial banks in Shaanxi Province from 2010 to 2016,the empirical analysis shows that the non-interest income of the diversified operation is positively correlated with the net asset return rate of the performance of rural commercial banks.Significantly,the former has a significant positive effect on the latter;the quality of loans plays a part in mediating the impact of diversification on the performance of rural commercial banks.Finally,it proposes countermeasures from four aspects:strengthening the diversified management level,effectively improving the quality of loans,strengthening the technology introduction and talent cultivation of diversified operations,and creating a good external environment.