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The Analysis of the Sustainable Growth of Chinese and Foreign Commercial Banks

On 02/10/2014, in Finance, by rain

Commercial banks are not only an important component of China’s financialindustry, but also are also the major force to maintain and promote the smoothoperation of China’s economy. In the era of increasingly serious resource constraint,the sustainable growth of commercial banking is a hot issue in the academic field.Since the outbreak of the international financial crisis in Jul2008, people began topay more attention to how to make the commercial banks on a sustainable growthpath, which allows the commercial banks to ensure a high growth business andachieve the Enterprise value in the condition of established financial goals in thisprocess.By using the normative and empirical analysis, this paper built a theoreticalframework for analyzing the sustainable growth of the commercial banks after the keyconcepts being clarified. In empirical part, the samples are selected as16China’s and32foreign listed commercial banks. Through the investigation of the status quo andtheoretical analysis, this paper researches the status of sustainable growth and actualgrowth of them in the last five years (2006-2010) by descriptive statistic, Wilcoxonsigned rank test and multiple linear regression analysis, etc. Then we compareChinese commercial banks with the foreign commercial banks by the actual growthrare, sustainable growth rate, ROE, the relativity of growth speed and value goal, theimpact of the size and age of the commercial banks on the value goal. It also pointedout the characteristics of them and tested the related hypothesis, and analyzed whyresult in the difference. Main research findings are as follows:The actual growth rate of China’s listed commercial banks is higher than thesustainable growth rate in the same period, which means they achieved “high growthrate” rather than sustainable growth. The foreign commercial banks did not achieve”high growth rate”, but they achieved sustainable growth basically.The change of Enterprise value of Chinese commercial banks is not significantly related to the change of growth speed. But the change of Enterprise value of foreigncommercial banks is significantly related to the change of growth speed. Besidesgrowth speed, the impact of the size and age of commercial banks on the value goal isalso different.Finally, it proposed deepening the corporate governance of China’s commercialbanks and balancing the relationship between dividend payments and retainedearnings according to the results of empirical and comparative analysis.

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On the Instirutional Risk of Commereial Banks Credit Operation in China

On 25/09/2013, in Finance, by rain

After nearly30years development, especially into the21st century, China has gradually integrated into the wave of financial globalization, China’s banking industry has achieved a great development,whether in the variety of business, the scale of development, or the innovation ability and Management level.In recent years, in the environment of our country’s Economic growth, the state-owned commercial bank constantly increasing the supply of credit, the credit risk Management of commercial banks has increasingly become the important contents for sustainable development. Especially in the current complex and volatile international Economic and financial situation, China’s commercial banks still need to Crossed the barrier–the quality of loan,in order to maintain a good momentum of sustainable development.By observing the growth process of the Bank of China, Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China, we find that the Development of four banks in Stock market is closely linked to the Government to inject huge sums of money stripping the non-performing loans. Moreover, the current proportion of non-performing assets of state-owned bank will continue to downward, and the new non-performing loans continues to increase, the control of the quality of credit assets has become a very important day-to-day work to commercial banks. Especially in recent years, with the changes of national macro-control policies, market conditions and business, the credit risk of commercial banks showing new features and new trends. How to improve the Management mechanism and effectively prevent and resolve the credit risk are the current problems that commercial bank need to be solved. Through the analysis of the cause of non-performing loans of state-owned commercial Banks of our country, the author find the non-performing loans produced by the institutional risk accounted for larger proportion and the business bank of our country faces from all aspects of the institutional risk.The main significance of this thesis lies in finding out effective way to improve the quality of assets of commercial bank through the analysis of a variety of institutional risk that China’s commercial bank facing in the course of credit management.The institutional risk be analyzed in this thesis includes not only the commonly referred to as macro-Economic system risk but also the medium industry system risk and micro Enterprise management policies and the risk of the bank’s internal operating system. The purpose of this thesis is to enhance the credit and risk management ability of China’s state-owned commercial bank comprehensively. It highlight the combination of theoretical research and applied research, makes multi-disciplinary knowledge together and play the advantages of comprehensive research. With this, it enhance the comprehensive, applicability and operability of the research results.The thoughts of this thesis can be listed as follows:It elaborate the theoretical connotation of the institutional risk in commercial bank credit business at first. Then study the theoretical roots of the formation of commercial banks institutional risk under the market economic system. It analyzes the characteristics of the institutional risk in China’s state-owned commercial credit business from both internal and external. It gives further analysis of the process and produce mechanism to various types of risk and uses empirical analysis method to draw research conclusions. At last, it gives policy suggestions of the ideas and strategy to the institutional risk prevention in China’s state-owned commercial banks. The thesis draws on predecessor’s research achievements and gives my new opinions.

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Operating Performance Analysis of the Four Major State-owned Commercial Banks

On 25/09/2013, in Finance, by rain

With the development of market economy, people has paid more and moreattention to the financial industry, because its rise and fall have exerted an enormousinfluence on the development and stability of the overall Economic.The Commercialbank is the main body of the financial industry. Its business performance is in part areflection of the macro economy development, on the other hand,that is influenced bythe physical Economic.So it plays the role as the “regulator” and the “mirror”. Thehistory of commercial bank is very long, and its Management mode also undergoesseveral changes, from the initial assets Management to off-balance sheet management,the attention of performance evaluation also transferred accordingly. Therefore, thefinancial analysis and the performance evaluation of the commercial bank can help usunderstand the condition of business development, looking for advantage andproblems to lay a solid foundation for the future development of commercial banks ofChina to form a unique core competitiveness and win victory in the increasinglyfierce competition.This article is based on the above reasons, using the financial index system to givea comprehensive explanation and analysis about the performance of commercialbanks by means of case study, and selecting four major state-owned commercialbanks of China (Bank of China, Agricultural Bank of China, Industrial andCommercial Bank of China, Construction Bank of China)2010annual financialstatements as the analysis objects. Firstly, compared financial indicators which aredisclosed in the listed bank statement with the performance evaluation indicators ofgeneral industry Enterprise, and making an analysis of the difference from the angle ofindustry specific, pointing out the defects of the financial indexes disclosed bycommercial banks. Secondly, since the bank’s management focus on profitability,safety, liquidity, this article complements and reclassify the existing financialindicators in these three aspects. According to the intrinsic meaning of the indicators,financial indicators are divided into four aspects as profitability, capital security, riskmanagement and operational efficiency, then discussing the relationship between the specific indicators and various types of indicators briefly. Thirdly, apply there-classification index system into the operating performance evaluation of four majorcommercial banks of China to identify their shortcomings and advantages in themanagement. At the same time of comprehensive analysis, pay attention to theindicators which reflect the unique attributes of the commercial bank management.Finally, evaluating the current business, risk management, cost control situation of thefour banks, and give the recommendations to improve the performance ofCommercial Banks. In addition, make outlook combined with the development trendof banking industry of China.The starting point of this article is not to reconstruct a new performance evaluationsystem, but rather focuses on the complement and re-classification of the existingfinancial evaluation and apply it to the comparative analysis of the performance ofcommercial banks. The object is to help stakeholder understand how to use financialindex this objectivity performance evaluation tool to in-depth analysis of commercialbanks operating conditions.This article has strong practical value.

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An Empirical Research of CSR Impact on Financial Performance of China’s Listed Commercial Banks

On 21/09/2013, in Finance, by rain

With the rapid development of industrial economy,many industrial giants andmultinational companies was born in the corporate merger wave in the early20thcentury,their mad pursuit of profit regardless of the business activities of the socialimpact caused by the monopoly and restrict competition, the Social gap between richand poor started to increase; the resource stock plummeted; the ecologicalenvironment deteriorated sharply;counterfeiting and commercial fraud continue tooccur,all these situations make people began to question the single operator purposeof pursuiting profit maximization, and began to realize the importance of CSRcommitment. As the core of modern economy and an important means of socialredistribution of resources, the financial industry is also given more attention to CSRin the wave of the CSR movement as well as made various attempts and exploration inthis area,especially in the21st century, In the context of Economic globalization, thecompetition between banks has been mainly on the hardware into software; Mainlytechnical, product competition into Philosophy and Moral standards.Concerned aboutthe legitimate rights and interests of all stakeholders,to win a wide range of publictrust and support,is the fundamental to the success of the banking sector.Based on the financial crisis for background,this paper first introducted thetheoretical foundation of financial evaluation of CSR about commercial banks, anddefines the concept of CSR and Social responsibility system contains sixelements,including shareholders, consumers, employees, government, community,Environmental responsibility,then,from the financial point,the article builds a CSRevaluation index system according to the content of CSR appraisal. Once again, thepaper chooses listed commercial banks in Shenzhen and Shanghai stock exchanges asresearch object over the period2006-2010,using the above model to appraisal theCSR after collecting data which are reflect of CSR, then tests the correlaterelationship between commercial banks fulfill their social responsibilities andcorporate financial performance empirically. Through the empirical studies, we foundthat there are positive correlation between commercial banks to fulfill socialresponsibility and financial performance.Finally, according to the empirical analysisand the reality of CSR in commercial banks, the paper puts forward some proposals tostrengthen the social responsibility of commercial banks.

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Transformation of Commercial Banks Under the New Situation

On 21/09/2013, in Finance, by rain

Commercial bank Management transformation theory is not a new topic, but, in the current our country commercial bank Management practice, especially after the global financial crisis, bring regulatory environment and business environment changes, makes commercial bank Management transformation still is a very important content, and it is a very urgent question. Therefore, the research has important theoretical and practical significance.This paper expounds six chapters, the first chapter is an introduction of this paper, this paper expounds the background and significance of both at home and abroad, the current situation and the developing trend. The second chapter presents capital constraints and commercial bank management transformation in the paper. Chapter3shows the new situation of commercial bank and the transition direction. This chapter4shows transformation strategy and measures under the new situation of the commercial bank. Chapter5combined with commercial bank management practice finally, through to the domestic Economic capital management, the pioneer of China construction bank head office of this case, to the theory of Economic capital management and structural change in the modern commercial bank management is the only way of transformation. The sixth chapter presents the study conclusion and the future research direction.After the financial crisis, the commercial Banks face at home and abroad and the operating environments has changed a lot, and at the same time, the regulatory environment has changed greatly. Domestic commercial Banks in the face of shareholders, supervision, and increasingly severe market restraint at the same time, after the financial crisis facing influence and lessons, domestic economy structure adjustment, its own profit single structure and take off the media and the financial markets financial deepening brings a series of challenges. How to deal with this a series of challenges, strengthen management transformation is imminent deal with the road, the advanced foreign commercial Banks in operation in the transformation of experience, good Economic capital through their management capacity and reasonable management structure makes it a great progress has been made in business development. The business bank of our country, how to realize the transformation of business, must want to have a clear direction, at present, to improve the utilization efficiency of the capital market, stable growth, increasing the service ability, strengthen risk control ability, promote innovation consciousness is certainly the only way of commercial bank management transformation. Combining with the commercial bank management practice, this paper expounds the business transformation in how to through the economic capital management, FTP principles are the allocation of resources, the reasonable control risk several aspects to strengthen internal management and optimizing the structure of business. Finally, this article through to the domestic economic capital management, the forerunner of the China construction bank of this case, to the theory of economic capital management and structural change in the modern commercial bank management is the only way of transformation.

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Studying of Implement Internal Ratings Based Approaches of Z-Bank

On 20/09/2013, in Finance, by rain

In the Economic situation of the integration of the global Economic and financial, For China’s traditional commercial banks, how to speed up the process of internationalization and be geared to international standards, how to improve the level of modernization of risk Management, in order to better deal with the fierce competition of the advanced foreign bank in the fully open of banking sector, are very serious problems placed in front of us. With the pace of China to accelerating implementation of the new Basel Capital Accord, the commercial banks are required to implement the Internal Ratings Based Approaches (IRB) of the New Basel Capital Accord in their credit risk managements.The implementation the IRB in Z commercial bank is both the requirement of the external regulatory, and the need of internal Management, the implementation of the IRB is the need to accelerate the process of internationalization for Z commercial banks, and the inevitable trend of the adapting to the new regulatory requirements, and an important means to improve the bank’s core competitiveness, and in favor of improvement the overall level of risk management and promotion the construction of commercial bank credit culture.In this paper, based on the urgent need of implementation of the IRB in the Z Commercial Bank, first through the concept of the theory of the IRB, the connotation of dimension, the Basic framework of key indicators and measurement methods are described, followed by Z commercial bank’s current rating system analysis to identify the gap. The next study from eight aspects of risk classification of assets, corporate structure improvement, debt rating, the rating of customer credit rating, the accumulation of historical data, IRB model test of risk parameters, risk mitigation tools to manage Z commercial banks to implement internal rating the law needs to focus on solving the problem. Finally, the Z commercial banks to establish the concept of the internal rating model, initially proposed corporate clients credit rating, personal customer credit scoring, credit asset risk classification of three aspects of model building program.In this paper, the analysis and studying of the problem and proposed countermeasures from the author is based on the research results through using the theory studying from MBA into the implement the IRB in Z commercial banks. And, they have some practical significance on the domestic commercial banks and joint-stock banks to implement the IRB.

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Impact of Corporate Governance on Commercial Banks’ Risk-taking in China

On 20/09/2013, in Finance, by rain

Basel Committee on Banking Supervision and Administration Commission has issued more than one paper to emphasize on the importance of sound corporate governance mechanism for enhancing the ability of commercial banks to guard against risk; the role of sound corporate governance to reduce commercial banks’risk is also reflected in “Basel Ⅱ”; the subprime mortgage crisis mercilessly expose all the shortcomings and deficiencies of the corporate governance in the U.S. banking sector. Corporate governance’s significant impact on commercial banks’ risk-taking has already become the consensus of the community. With the continuous development and further opening degree of China’s financial market, China’s commercial banks are facing more and more diverse risk. In this context a clear understanding of the relationship between the corporate governance and commercial banks’ risk-taking in China is very important for improving the corporate governance of China’s commercial banks and helping banks to guard against the risk they face.This article firstly selects six representative banks from the listed commercial banks in China; and analyzes the status and characteristics of commercial banks’ corporate governance in China from the aspects of ownership concentration, shareholding property, Board Governance, Supervisory Board governance and incentive mechanism. Secondly, author theoretically analyzes the impact of ownership structure, supervision mechanism and incentive mechanism on commercial banks’ risk-taking in China. Finally, author empirically tests the impact of corporate governance on sample banks’ risk-taking based on the data of listed banks. Based on the theoretical analyze and empirical test, combined the status and characteristics of commercial banks’ corporate governance in China, this paper draws following main conclusions:(1)highly concentrated ownership structure has a positive impact on commercial banks’ risk-taking in China;(2)excessive state ownership has a negative impact on commercial banks’ risk-taking in China;(3)the size of Board has no significant effect on commercial banks’ risk-taking in China;(4)the introduction of independent directors has a positive impact on commercial banks’ risk-taking in China;(5)the increasing scale of Supervisory Board has a negative impact on commercial banks’risk-taking in China;(6)the introduction of external supervisors has a negative impact on commercial banks’risk-taking in China;(7)current remuneration incentive mechanism has a negative impact on commercial banks’ risk-taking in China.

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Research on the Commercial Bank’s Investment Banking Business Development Strategy

On 20/09/2013, in Finance, by rain

There are more difference between Commercial banking and Investment bankingbusiness.The traditional commercial banking business is mainly about Deposits, loans,settlement business in the indirect financing market. Investment banking business.is relevantto all securities, funds, bonds in the capital market.” separate operation, separatesupervision” of the financial system is executed in our country. Commercial banks todevelop investment banking business is prohibited.Since the reform and opening up, our country has achieved rapid Economic growth. Thestate-owned commercial banks have made many contributions. In the impact of external andinternal pressure of the dual challenge of surviving,the Chinese Commercial Banks mustneed Continuous innovation. At the national laws and policies to allow the premise, thedevelopment of investment banking is an inevitable choice.The topic of state-owned commercial bank’s investment banking business developmentstrategy mode is researched by the systemic studies. The analysis of organization form,product form as well as in business organizations, products and its supporting system hasbeen done on the basis of the analysis of commercial banks business developmentframework characteristics. In the interactive development and resource integration under theguidance of thought, Bank A has done a lot of investment banking business about Financialadvisers, Syndicated loans, Mergers and acquisitions, asset securitization and so on. There isa certain referential significance in the current market situation of the commercial bank’sinvestment banking business development.

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The Research on the Problem and Countermeasures of Small&Micro-enterprises Financing

On 20/09/2013, in Finance, by rain

Small&micro-enterprises(MSE) played a huge role in promoting the process ofChina’s Economic development,it is an important part of economy in china. Small&micro-enterprises’s development will promote employment, Economic growth, socialstability, and technological innovation better too. However, there are serious problemwith financing for them, An important driving force is adequate and effective supplyof funds, so sloving these problems will make the development better and faster.With Economic development and Social progress, the financing problems ofenterprises, especially small&micro-enterprises, will be paid close attention bycommunity more and more. People’s Bank forum has held in August2011, this forumclearly put forward the depth of the credit structure optimization, and enhancedfinancial institutions, especially support more money for small&micro-enterprises,we must take measures to promote the cooperation between commercial banks andsmall micro-enterprises. All measures are maked to solve the the financing problemsof small&micro-enterprises.In this paper, The main research is the financial relationship between commercialbanks and small&micro-enterprises. The first part of the paper is financingbackground, research significance, research purposes of small&micro-enterprises,then is the Basic theory of small&micro-enterprises, commercial banks and the basictheory of financing. The next part is present situation of small&micro-enterprisesfinancing, Financial services of commercial bank and the background of commercialbank would not like to give financial support for small&micro-enterprises. Then isthe part of the Game between small&micro-enterprises and commercial bank, theGame have Static Game and Dynamic Game between small&micro-enterprises andcommercial bank, and the Game about small&micro-enterprises, commercial bank and government. We can Through the game analysis to find out the various statesabout equilibrium, and it is the foundation about the countermeasure and proposal ofsmall&micro-enterprises financing. In the fifth chapter, we pose a lot ofcountermeasures and proposals.

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Study on the Relationship between Commercial Bank of Technological Innovation and Customer Satisfaction

On 19/09/2013, in Management, by rain

With the continuous development of financial products and services and the increasing maturity of information technology, the commercial bank in the products, services, processes and distribution channels and other aspects of technical innovation constantly, how to strengthen the innovation practice in order to achieve maximum customer satisfaction, has become a major bank issues of common concern. On the basis of market segmentation, to understand the business bank of technical innovation and the relationship between client satisfaction, is the bank building the core competitiveness of the important foundation. Therefore, the Commercial Bank of technology innovation and customer satisfaction, the relationship between the technological innovation to meet customer demand has caused the author’s research interests. In this paper, the combination of theory and practice from the perspective of commercial banks, and the study of technology innovation and customer satisfaction relationship, so as to commercial banks through technological innovation to improve customer satisfaction and provide a theoretical reference.Combined with the research subject, this thesis chapter is structured as follows:The first chapter:Introduction. This paper describes the research background, significance and the problems to be solved, then introduces the research content, method, framework, technical route and main innovative points.The second chapter:Literature review and commentary. Through the research of domestic and foreign technology innovation theory and the classification standards, defined on the Bank of technology innovation research scope and classification; at the same time, through the technology innovation and customer satisfaction related literature review, analysis and induction, this paper adopts the technical innovation measurement methods, measurement variables and measurement of customer satisfaction evaluation index system finally, on the basis of banks; customer satisfaction index system design principles, determining weight quantification. The third chapter:Conceptual model and research hypothesis set. Based on the theory and literature review of the establishment of this research, conceptual model, and the conceptual model in reference to the related variables were explained and decompositon, puts forward an empirical study need to be conducted to validate the hypothesis of the study.The fourth chapter:Study design and hypothesis testing. The study design was based on a conceptual model and research hypothesis based on this study, designed to illustrate the sample screening modalities, including sample bank research variable scope and definition; at the same time introduces the research data sources, and collect statistics of the questionnaire results, the sample data, the overall situation on the basis of the analysis, by the method of factor analysis to establish business customer satisfaction index system. Application of validity and descriptive statistical analysis, correlation analysis of technological innovation to customer satisfaction influence; finally validates the research hypothesis, empirical research conclusions drawn.The fifth chapter:Suggestions and prospects. The first of this study do integral explain, and summarizes the commercial bank how to enhance the innovation practice in order to achieve maximum customer satisfaction of the suggestions; then proposed the research limitations, can expand the scope of the study and future research directions in the field.