RESEARCH ON OPERATIONAL RISK MANAGEMENT OF COMMERCIAL BANKS IN CHINA

Abstract

The subject of this study is to examine the operational risk management of Chinese businesses. Five variables that have an impact on operational risk are selected in this paper; the dependent variable is the net profit of the bank and the independent variables are real GDP growth rate, non-performing loan ratio, deposit to loan ratio, and the SSE Composite Index. Seven representative banks listed on the Shanghai Stock Exchange in China were selected as the research population, and annual data for the period 2011-2020 were collected for the study. Eviews10 software was used to analyze the data of the seven listed banks for this study. The conclusions obtained from the data analysis conducted in this paper are that the net profit of banks has an inverse relationship to the non-performing loan ratio and the real GDP growth rate; the net profit of banks has a positive relationship to the SSE Composite Index, the deposit to loan ratio. The research in this thesis can provide a theoretical basis and reference for the operational risk management of commercial banks in China.