Changes in Core Capital Adequacy Ratio of Commercial Banks and Their Profitability

This paper empirically analyses the relationship between changes in core capital adequacy ratio and profitability of commercial banks. The results show that core capital adequacy ratio has a significant and positive influence on the profitability of commercial banks, and the influence on non-listed banks is greater than that on listed banks; the influence on agricultural commercial banks is the most, followed by that on joint-stock commercial banks and city commercial banks, but the influence on state-owned banks is not significant; the ROA of commercial banks has significant and positive lagging effects; after the financial crisis, the influence on non-listed commercial banks is weakened after the financial crisis, but the influence on listed commercial banks increases. Commercial banks should focus on increasing the tier-one core capital, simplify organizational structure, improve operational efficiency, and the government should encourage and guide commercial banks to issue subordinated bonds to replenish capitals.