Performance and Risk of the Chinese Financial Holding Companies

We conducted an empirical research based on a sample of 13 companies from the year 2007 to 2013. When faced with various kinds of risk,a financial holding company can improve its ability to control risk by reallocating the ownership of risk,thus reducing operating costs and improving profit. By comparing the performance of the bank-dominated financial holding company with the one of independent companies,we find that the financial holding company 'profit level is significantly higher than independent banks,whose risk is even higher.