The Impact Of Cross-regional Operation Of City Commercial Banks On Business Performance

city commercial banks are an important part of China’s banking system.In recent years,cross regional operation has become an important strategy for credit expansion of urban commercial banks.Based on the data of 126 urban commercial banks from 2006 to 2019,this paper empirically analyzes the impact of cross regional operation on bank performance.In order to investigate the operating performance more comprehensively and logically,the performance is divided into two aspects: the operating performance of main business and the overall cost-benefit performance.The former includes deposit and loan leverage,loan quality and income structure,and the latter includes the overall cost and income of banks.The empirical results show that cross regional operation significantly improves the deposit and loan ratio of urban commercial banks and reduces the non-performing loan ratio,but has no significant impact on the overall cost-benefit.According to the geographical area where the bank is located,the business performance of the cross regional operation of urban commercial banks in the East and the central and western regions is compared.The heterogeneity is reflected in that the banks in the East can better realize credit expansion,improve the contribution rate of main business profits to performance,and optimize the loan quality due to their advantages in resources,talents,technologies and management,it improves the efficiency of cross regional allocation of financial resources.However,the urban commercial banks in the central and western regions naturally have the relative disadvantage of economic welfare,it is difficult to enter the remote market,and the efficiency of resource allocation has not been significantly improved.The homogeneity is reflected in that the urban commercial banks in the two geographical regions have not been significantly affected in terms of cost and income.Based on the conclusion of heterogeneity,this paper makes a case study,and selects Bank of Shanghai and Bank of Chengdu as the representatives of eastern and western urban commercial banks for comparative analysis.In addition,based on different cross regional caliber and different sample range,this paper makes a robustness test,and the conclusion is still valid.Finally,we analyze the samples in different policy stages,and we also see that in the process of policy supervision from loose to tight,the non-performing loan ratio in the main business performance of urban commercial banks has changed from positive to negative,indicating that the policy supervision is indeed deliberately reducing the risk of cross regional operation of urban commercial banks.