A Study On The Impact Of Lightness-oriented Transformation Of Commercial Banks On Their Business Performance

In 2018,the contribution rate of the tertiary industry to GDP of China reached 59.7%,and the economy as a whole shows a shift from ‘heavy' to ‘light'.At the same time,the market-oriented reform of interest rate system has narrowed the interest margin between banks' deposits and loans,which intensified the competition among banks.The transformation of economic momentum has led to the transformation of the developing mode of banks.Each bank has actively carried out the lightness-oriented transformation from ‘heavy' to ‘light' and formulated the corresponding lightness-oriented strategy.However,the lightness-oriented transformation in China is still in its infancy.Various lightness-oriented businesses and the adjustment of structures will have impacts on the business performance of banks.This paper analyzes the lightness-oriented transformation from three aspects,which is‘light-asset',' ‘light-income' and ‘light-operation',using the proportion of financial market business to total assets,the proportion of non interest income to operating income,and the ratio of retail loans to corporate loans respectively.This paper selects 14 representative listed banks as the research objects,and compares the development of transformation in recent years.It is found that the trending of light-income and light-operation of banks were more obvious.Theoretically,this paper analyzes the internal logic of the impact of lightness-oriented transformation on banks' business performance.For instance,the problems of term structure mismatch and the cross selling increase the risk of banks.And the profitability of banks will increase due to various products and low costs.Empirically,this paper uses the non-performing loan ratio and the return of total assets to measure the banks' business performance.The empirical results show that the transformation of light-income significantly reduces the profitability.The transformation of light-asset and light-operation do not significantly affect the profitability of banks.The transformation of light-asset and light-income significantly increases the risk of banks,while the transformation of light-operation reduces the risk.Because of the different scale of banks,the degree of lightness-oriented transformation is also different.This paper tests the heterogeneous impact of the lightness-oriented transformationof banks with different scales on their business performance.At present,not all the lightness-oriented transformation of commercial banks can increase the profitability and reduce the risk of banks.Therefore,each bank can not blindly promote the lightness-oriented transformation.It is necessary to objectively view the impact of different levels of lightness-oriented transformation on the bank's business performance in combination with the bank's own characteristics.Banks need to improve the risk management system of financial market business,optimize the investment strategies to solve the problem of term mismatch,build the talent team of financial market to accelerate the development of new products.Banks should also reasonably optimize the structure of non-interest income,increase risk and cost control.Improve the cross selling strategy of retail business,standardize the outsourcing channels,increase the support of small and medium-sized micro enterprises,and ensure the authenticity of the purpose of retail loans.