Research On The Influence Of Non-interest Income On Profitability Of Listed City Commercial Banks In China

Under the background of the market-oriented reform of interest rate in our country,the continuous deepening of financial disintermediation and the rapid development of Internet technology,which has brought certain pressure to the development of the banking industry,makes the competition between banks increase and constantly squeeze the deposit and loan spread,resulting in their profits being affected.So banks have to find new sources of revenue to keep themselves profitable.In recent years,there has been a certain development of non-interest income of banks,but whether the increase of non-interest income will bring about the improvement of bank profitability has not been a unified conclusion.At the same time,most of the current research is aimed at state-owned commercial banks and joint-stock commercial banks,while ignoring city commercial banks.Since urban commercial banks are of great significance to local economic development,this paper studies the impact of non-interest income on profitability of listed urban commercial banks,and puts forward suggestions on optimizing income structure according to the research results,so as to help listed urban commercial banks form their own characteristics and advantages under the new economic background,and improve their profitability while achieving transformation.Firstly,this paper collects and collates the relevant research literature at home and abroad,and has a certain understanding of non-interest income.On this basis,the paper expounds the concept and characteristics of non-interest income,and then analyzes how the non-interest income affects the profitability of listed city commercial firms.Then,through the collected data,this paper introduces the development status of China’s listed urban commercial banks and their non-interest income,from which it is found that there are problems such as low proportion of non-interest income,unbalanced structure and high volatility.Then,the data of 17 urban commercial banks listed in China’s A-shares from 2012 to 2021 is selected to build A fixed-effect model to study the impact of non-interest income on profitability of listed urban commercial banks in China.The following conclusions are drawn through regression analysis:(1)Non-interest income of listed city firms has a significant positive impact on their profitability,and the profitability of listed city firms can be improved by increasing the proportion of non-interest income.(2)Each component of non-interest income of listed city firms has a significant positive impact on their profitability.An increase in the share of net fee and commission income,investment income and other interest income can boost a bank’s profitability.Finally,according to the research conclusions and problems found in the previous status quo,targeted optimization suggestions are put forward,including steadily increasing the proportion of non-interest income of listed city commercial banks,optimizing the structure of non-interest income,strengthening cost control and risk prevention,and reasonably controlling the size of assets,so as to help listed city commercial banks better develop non-interest income and improve their profitability.