Mixed Operation,Non-interest Income And Commercial Bank Performance

On April 8,2018,the new China Banking and Insurance Regulatory Commission was announced in Beijing,marking the transition of China’s commercial banks from the initial single business model to the current diversified mixed business model.At the same time,with the continuous maturity of computer network and mobile technology,the rapid development of Internet finance,the completion of market-oriented interest rates,and the growing demand for diversified financial services from users,the rapid development of other non-bank financial institutions,such as insurance companies,trust companies,and fund companies,has had a strong impact on the traditional deposit-and-loan business-oriented business model of commercial banks.The traditional commercial bank spread profit model has failed to meet the goal of rapid growth in net profit.The traditional commercial bank spread profit model has failed to meet the goal of rapid growth in net profit.Therefore,China’s commercial banks have begun to actively seek diversified mixed-business operation models,vigorously develop non-interest business,seek new profit growth points,keep the operating income up,and have begun to embark on the road of diversified mixed operations with diversified service functions and diversified income structures.Based on introducing the background of the topic,the significance of the topic,and the status of literature research at home and abroad,this article defines the concepts of diversified mixed operations and non-interest income.And based on asset portfolio theory,diversified business theory,scope economy theory,and synergy alienation risk theory,analyze the impact of commercial bank performance by transmission mechanism theory from the perspective of diversified mixed operation and non-interest income of commercial banks in China.Then put forward three research hypotheses in this paper.Based on the financial data of 16 representative listed commercial banks in China from2007 to 2018,on the one hand,analyze the motivation and current situation of diversified mixed operation of commercial banks;On the other hand,it compares and analyzes the current development of non-interest income of different types of commercial banks in China from the three aspects of the overall scale,income structure and overall proportion of non-interest income,and summarizes the development law.And use dynamic GMM estimation method to conduct empirical analysis,establish a dynamic panel model and analyze how China’s commercial banks’ diversified mixed operations and non-interest income affect commercial bank performance.Based on this,the impact of different components of non-interest income on the performance of commercial banks is further analyzed.The empirical results show that,first,the level of diversified mixed operations is positively related to the performance level of commercial banks,and the improvement of the level of diversified mixed operations can improve the performance level of commercial banks and stabilize the returns of commercial banks;second,The increase in the proportion of non-interest income will weaken the positive effect of diversified mixed operations on the performance of commercial banks.Simply increasing the proportion of non-interest business income by commercial banks is not equivalent to the improvement of the level of diversified mixed operations.Operating and non-interest income have inconsistent effects on the performance level of commercial banks,Because the increase in the proportion of non-interest income will weaken the positive effect of diversified mixed operations on the performance of commercial banks.The seemingly contradictory conclusion is essentially a double-edged sword attribute of non-interest income,and it is the result of the combined effect of "direct exposure effect","diversification effect" and "write-off effect";third,from the perspective of the composition of non-interest income of commercial banks,net fee and commission income is significantly positively related to the performance level of commercial banks,but other non-interest business income is negatively related to the performance level of commercial banks.Therefore,commercial banks should optimize non-interest incomestructure and adopt the most suitable own mixed operation structure when improving the level of diversified mixed operations.Finally,according to the results of the present situation analysis and empirical analysis,in the context of a changing financial market,in order to promote the healthy and orderly development of the diversified and mixed operations of China’s commercial banks,to accelerate the transformation of China’s commercial banks and improve their performance levels,the following specific countermeasures were suggested:(1)Accelerate the introduction of relevant policies,laws and regulations,and create a good macro development environment for the diversified mixed operation of commercial banks in China;(2)Commercial banks need to develop their own diversified mixed business model in line with the reality of China’s banking industry and their own characteristics;(3)constantly optimize their internal structure of non-interest income to create new profit growth points;(4)different types of Commercial banks should combine their own business characteristics to improve business services and risk control mechanisms.