Empirical Analysis of the Influence of Interest Income on the Operational Efficiency of Commercial Banks

DOI

10.2991/978-94-6463-260-6_57How to use a DOI?

Keywords

Efficiency of Bank Operation; Interest Income; Commercial Bank

Abstract

With China's interest rate liberalisation reform, the interest margin between deposits and loans in the banking industry has narrowed significantly. In order to maintain market competitiveness, more and more commercial banks are starting to reduce their dependence on traditional interest income business. However, there has been no research on whether Interest income is no longer important to the business performance of commercial banks and whether the impact of interest income on the business performance of commercial banks has changed. Therefore, this paper collects data on Interest Income Ratio, Asset-liability Ratio, Non-performing Loan Ratio, Total Asset Turnover and Per Capita Profit of 42 listed banks from 2010 to 2020 from WIND and CSMAR databases (some missing data are supplemented by bank statements, and variables are also reduced at 5% level to ensure data validity). Construct a fixed effects regression model. In addition, two stage least square method is used to test the endogeneity of the model. The robustness of the model is tested by changing the sample observations, performing Winsor analysis and processing on interest income, and replacing interest income with non-interest income/total assets. Finally, the following conclusions are drawn: (1) interest income has a negative inhibitory effect on efficiency; (2) the effect of interest income on efficiency is significantly heterogeneous.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Taiyue Chen
PY  - 2023
DA  - 2023/09/28
TI  - Empirical Analysis of the Influence of Interest Income on the Operational Efficiency of Commercial Banks
BT  - Proceedings of the 2023 International Conference on Management Innovation and Economy Development (MIED 2023)
PB  - Atlantis Press
SP  - 447
EP  - 457
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-260-6_57
DO  - 10.2991/978-94-6463-260-6_57
ID  - Chen2023
ER  -