Research On Liquidity Risk Assessment Of Huishang Bank

In recent years,prevention of liquidity risk has become a topic of widespread concern in Chinese banking industry.The liquidity risk of commercial banks has strong infectivity and destructive power,which may lead to financial risks if not paid attention to in time.Chinese city commercial banks have weak ability to deal with liquidity risks due to their small scale and fierce market competition.Its ability to withstand liquidity risks is also limited.In this context,this thesis chooses the city commercial bank represented by Huishang Bank as the case study object of liquidity risk,conducts evaluation and measurement research on its liquidity risk,and then puts forward effective optimization and prevention suggestions for the existing liquidity risk problems,which has certain theoretical significance and practical value.This thesis first defines the concept of liquidity risk and liquidity risk management.Based on the theory of liquidity risk management and measurement and control,it summarizes the main methods of commercial banks’ liquidity risk management strategy,influencing factors and stress testing.Secondly,on this basis,this thesis carries out preliminary risk identification of Huishang Bank’s liquidity risk from macro and micro perspectives,and selects part of liquidity supervision and monitoring indicators for qualitative research to complete the current situation analysis of Huishang Bank’s liquidity risk,and points out the existing problems in its liquidity risk management.Then,this thesis uses factor analysis method and multiple regression model to conduct quantitative analysis on the liquidity risk level of Huishang Bank.Then,combined with the results of factor analysis,this thesis selects appropriate risk driving factors and builds a stress test model to analyze the liquidity performance of Huishang Bank under different stress scenarios.Finally,on the basis of theoretical analysis and empirical results,this thesis puts forward some suggestions to strengthen the liquidity risk management of Huishang Bank.The main research conclusions are as follows: First,through the preliminary risk identification of Huishang Bank,it is found that it is facing a relatively severe external environment and financing liquidity risk pressure.Specifically,the liquidity matching rate of Huishang Bank in 2020 is lower than the regulatory standard,and there are big problems in the pre-,mid-and post-audit management of loan business security.Second,through the analysis of the current situation of Huishang Bank’s liquidity risk through the index analysis method,it is found that in the level of capital structure,the deposit ratio of Huishang Bank keeps rising,the liquidity ratio remains adequate,and no liquidity gap has been found.However,in terms of credit asset quality,the non-performing loan ratio and loan concentration of Huishang Bank are relatively high.The non-performing loan ratio has decreased somewhat,but it is still higher than the regulatory red line.In terms of profitability,in recent years,Huishang Bank’s return on capital and return on total assets have both declined,its net interest margin and net interest margin have also declined,and its non-interest income performance is also lower than that of its peers.Thirdly,the result of factor analysis shows that profitability,credit quality and asset and liability structure are the three factors affecting the liquidity of Huishang Bank.The overall liquidity level of Huishang Bank was poor due to declining profitability,deteriorating credit quality and over-reliance on peers.Fourthly,the stress test results also show that the deterioration of net interest margin or interbank lending rate may cause Huishang Bank to fall into a liquidity crisis.Therefore,in addition to reversing the problem of low net interest margin and declining revenue capacity,Huishang Bank should also be alert to the adverse impact of changes in external interbank lending rates on its liquidity.Based on theoretical analysis and empirical analysis,this thesis puts forward the following suggestions for Huishang Bank’s liquidity risk prevention and optimization: reduce the multiple dependence of the banking industry and optimize the structure of assets and liabilities;Innovate business development channels to improve sustainable profitability;Control the ratio of non-performing loans and improve the quality of credit assets;High quality to promote digital transformation,improve the level of risk control;Improve internal and external liquidity governance structure,enhance risk management awareness.