Research On The Influencing Factoes Of Commercial Banks’ Net Interest Margin Under The Interest Rate Marketization In China

Before the further reform of China’s interest rate marketization is not deep enough,the benchmark deposit and loan spread of the central bank is the key to affect the net interest margin of banks.However,with the further progress of China’s interest rate marketization reform,the relaxation of the limit on the floating range of deposit and loan interest rates of commercial banks has virtually increased the competitive pressure among commercial banks.Although China adopts a gradual reform,if commercial banks do not take the time to form a reasonable pricing model and mechanism in the gradual process,it is likely to damage the net interest margin of commercial banks,thus affecting the operating efficiency of commercial banks.Interest rate marketization has brought a variety of challenges to commercial banks.Therefore,under this background,commercial banks should think more about how to avoid disadvantages and to seek advantages.Net interest margin is the main source of profit for commercial banks,an effective indicator to evaluate the pricing power of deposits and loans,and an important indicator to reflect the intermediary transaction cost and intermediary efficiency of banks as the main body of social indirect financing.Therefore,it is of great significance to study the factors influencing the net interest margin of China’s commercial banks under the interest rate marketization.Starting from the background that interest rate marketization is basically completed,this paper firstly conducts theoretical analysis on the influencing factors of commercial banks’ net interest margin.Theoretical analysis part from the bank internal factors and external factors,and combined with China’s actual situation appropriately increase the impact of net interest margin factors.Internal factors include intermediary business,transaction size,asset size,risk aversion,operating cost,opportunity cost of reserves,hidden interest expenditure and credit risk.External factors include interest rate risk,market structure,interest rate policy,economic growth rate and inflation.Second in the empirical part will influence factor index,to expand the model,using correlation analysis and factor analysis and regression analysis methods of 21 of the commercial banks in 2010-2017,the empirical data,the following conclusions: one is under the interest rate marketization operating costs,reserve opportunity cost,implicit interest payments,interest rate risk,the benchmark interest rate differentials,the GDP growth rate,inflation rate is a positive impact on commercial bank’s net interest margin,intermediary business,transaction scale,asset scale,the degree of risk aversion,credit risk and market structure have negative impact on net interest margin.Second,among internal factors,intermediary business is the key factor to determine the net interest margin,while among external factors,interest rate risk is the key factor to determine the net interest margin,and the influence of hidden interest expense on net interest margin is easily misjudged in spread management.Thirdly,the factor analysis equation obtained by factor analysis well covers the factors affecting the net interest margin.At last,the paper puts forward some Suggestions on the operation of commercial banks from the three aspects of expanding intermediary business income,preventing interest rate risk and optimizing hidden interest expenditure,aiming to provide reference for the spread management of Chinese commercial banks.Banks can provide high value-added financial services to expand intermediary business,adopt differentiated pricing to prevent interest rate risk,and increase the loan of intellectual property pledge to optimize hidden interest expenditure.