An Empirical Study On The Profitability Of Trust Companies Based On Factor Analysis And Fixed Effect Model

Since the establishment of the first trust company in New China in 1979,China's trust industry has gone through nearly 40 years of development.The scale of trust asset management has expanded rapidly,and it has now become the second largest asset management industry after bank wealth management.However,starting from 2018,in the context of the slowdown of China's economic growth,fluctuations in domestic and foreign situations,and the advent of the era of pan-investment management,the trust industry is facing a stricter regulatory environment,more intense competition and more pressing pressures for transformation This brings greater challenges to the profitability and development of China's trust companies.This article aims to evaluate and analyze the profitability of China's trust companies,and explore the factors.This article first briefly introduces and analyzes the concepts and theories related to the profitability of China's trust companies,and makes a qualitative analysis of the current status of the profitability of China's trust companies,referring to the problems of the profitability of trust companies.Subsequently,twelve indicators were selected from four perspectives to build a comprehensive indicator system for the evaluation of the profitability of China's trust companies,and a factor analysis method was used to comprehensively score,rank and analyze the profitability levels of 68 trust companies in China from 2014 to 2018.The company is divided into three categories of strong profitability,general and weak.Then use the fixed-effect panel regression model to conduct multivariate regression analysis on the relative factors,take ROC and LNPERNI as profitability indicators.Finally,the above empirical analysis results are summarized,and suggestions for improving profitability are made from the external and internal perspectives of the trust company.The empirical research on the profitability evaluation of trust companies mainly draws the following conclusions:(1)Based on the scores of factors in 2018,the overall profit level of China's trust companies was relatively high in 2018,but there was a large gap between the companies,and a few companies suffered serious losses;the overall market competitiveness was strong,and the industry was fiercely competitive;There is a large gap in the capacity and willingness of innovation between the companies,and some are still limited to traditional interest spread business;the overall expansion of the trust industry is not enthusiastic.(2)Based on the comprehensive score and ranking of trust company profitability evaluation from 2014 to 2018,the profitability ranking of China's trust companies has fluctuated greatly in the past five years;the overall profitability level is relatively high and stable,and has declined slightly in 2018;inter-company profitability gap is expanding since 2015.Based on the average score,22 trust companies with strong profitability,39 companies in general,and 7 weaker companies were classified.The empirical research on the factors affecting the profitability of trust companies mainly draws the following conclusions:The trust company's market share,trust asset growth rate,non-interest income share,GDP growth rate,and trust market size growth rate have a significant positive impact on the ROC of the trust company,the scale of proprietary assets and the ratio of non-performing assets have a significant negative effect.Market share,self-operated asset growth rate,proportion of highly educated talents,GDP growth rate,and trust market size growth rate have a significant positive impact on the per capita net profit of trust companies.