2019•2019 International Conference on Economic Management and Model Engineering (ICEMME)Requires access

The Influence of Revenue Structure on Bank Performance of Listed Banks in China: An Empirical Study on 16 Listed Commercial Banks

Ling Xu

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Abstract

With the continuous promotion of interest rate marketization, the profitability and the traditional business model of Chinese commercial banks are affected by a number of factors such as narrowing of net interest margin. Based on the quarterly report data (2010-2018) of 16 listed banks in China, this paper uses panel data method to study the factors influencing the performance level of Chinese commercial banks under interest rate marketization. The result shows that the performance is positively associated with fees and commission income, and negatively associated with the size of asset. At the same time, the influence factors are different between the four state-owned commercial banks and joint-stock commercial banks. Investment return and interest income have a significant impact on the profitability of four state-owned commercial banks, but it's not obvious on joint-stock commercial banks. According to the research results, this paper puts forward corresponding countermeasures and suggestions to improve the profitability of commercial banks under the interest rate marketization.

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What this paper is about

With the continuous promotion of interest rate marketization, the profitability and the traditional business model of Chinese commercial banks are affected by a number of factors such as narrowing of net interest margin. Based on the quarterly report data (2010-2018) of 16 listed banks in China, this paper uses panel data method to study the factors influencing the performance level of Chinese commercial banks under interest rate marketization. The result shows that the performance is positively associated with fees and commission income, and negatively associated with the size of asset. At the same time, the influence factors are different between the four state-owned commercial banks and joint-stock commercial banks. Investment return and interest income have a significant impact on the profitability of four state-owned commercial banks, but it's not obvious on joint-stock commercial banks. According to the research results, this paper puts forward corresponding countermeasures and suggestions to improve the profitability of commercial banks under the interest rate marketization.

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Available abstract

With the continuous promotion of interest rate marketization, the profitability and the traditional business model of Chinese commercial banks are affected by a number of factors such as narrowing of net interest margin. Based on the quarterly report data (2010-2018) of 16 listed banks in China, this paper uses panel data method to study the factors influencing the performance level of Chinese commercial banks under interest rate marketization. The result shows that the performance is positively associated with fees and commission income, and negatively associated with the size of asset. At the same time, the influence factors are different between the four state-owned commercial banks and joint-stock commercial banks. Investment return and interest income have a significant impact on the profitability of four state-owned commercial banks, but it's not obvious on joint-stock commercial banks. According to the research results, this paper puts forward corresponding countermeasures and suggestions to improve the profitability of commercial banks under the interest rate marketization.

Key concepts: Marketization, Profitability index, Net interest margin, Net interest income, Interest rate, Business, Panel data, China

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