2013•Jinrong luntanRequires access
The Impacts of the Capitals of Commercial Bank on Its Profitability
Zhang Bi
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Abstract
Based on the season’s data of Chinese 11 listed banks during 2006~2010, this paper uses the Least Square method to analyse the impacts of the capitals of commercial bank on its profitability. By the regression analysis of the two period of the profits of Chinese commercial banks, the paper concludes that, first, the capital adequacy ratio and the core capital adequacy ratio of Chinese commercial banks have positive impacts on profitability; second, the subsidiary capital adequacy ratio and the ratio of capital to asset have no significant impact on profitability. The paper suggests to raise the capital adequacy ratio and the core capital adequacy ratio so as to improve the profitability; to improve the capital markets and rasie the subsidiary capital adequacy ratio appropriately so as to raise the capital adequacy ratio and reduce the cost of capitals.