Research On The Impact Of Cross-regional Operations On The Performance And Risk Of City Commercial Bank

City commercial banks are an important part of China’s banking system.Their rapid development has further improved China’s banking system dominated by large state-owned commercial banks and effectively promoted the development of local economy and finance.In recent years,China’s regional economic integration process has accelerated,and the business scale of banking institutions has increased rapidly.Some city commercial banks are no longer limited to the local financial market,and gradually began to expand their business fields and explore cross-regional operation.From the perspective of policy,the cross-regional operation of city commercial banks in China has experienced different stages,such as "regulationliberalization-tightening-prudent development".Cross-regional operation of city commercial banks is the internal requirement of the development of the banking industry,but it also causes many problems.Research on the impact of cross-regional operation on the performance and risk of city commercial banks has become a major issue of concern to the theoretical circle and the financial industry.Based on the unbalanced panel data of 125 city commercial banks in China from2006 to 2020,this paper empirically studies the impact of cross-regional operation of city commercial banks on their own business performance and risk.Firstly,construct proxy variables to measure the degree of cross regional operation;Secondly,by selecting asset profit margin and non-performing loan ratio as proxy variables,a fixed effects model is established to empirically analyze the impact of cross-regional operations on the performance and risk of city commercial banks;Thirdly,group city commercial banks based on asset size,listing status,cross provincial operations,and geographical conditions,and conduct heterogeneity analysis of cross-regional operations on city commercial banks;Finally,propose countermeasures and suggestions to improve the cross-regional operation of city commercial banks.The research shows that(1)On the whole,cross-regional operation reduces the performance of city commercial banks and increase the risk of banks.(2)Heterogeneity analysis shows that the degree of cross-regional operation has a significant impact on the performance of city commercial banks with asset size less than 300 billion,but has no significant impact on their risk;The degree of cross regional operation has a significant impact on the performance and risk of unlisted city commercial banks,but has no significant impact on the performance and risk of listed city commercial banks;The degree of cross-regional operation has a significant impact on the performance and risk of city commercial banks that have not achieved cross provincial operation,but has no significant impact on the performance and risk of city commercial banks that have achieved cross provincial operation;The degree of cross-regional operation has a significant impact on the performance and risk of city commercial banks in the central and western regions,but has no significant impact on the performance and risk of city commercial banks in the east.Based on the above research results,suggestions are put forward from the perspectives of regulatory authorities and city commercial banks:(1)The regulatory authorities should gradually eliminate the scale preference of city commercial banks from the institutional level,implement classified supervision,and develop differentiated regulatory standards.(2)City commercial banks should clarify their own development orientation and carry out cross regional operations in an orderly manner;Strengthen risk management and do a good job in all-around risk control;Pay attention to the training of reserve personnel and strengthen the construction of talent team;We should innovate business types and take a diversified development path.