ANALYSIS ON INFLUENCING FACTORS OF COMMERCIAL BANK PROFITABILITY IN CHINA

Abstract

China's banking industry dominated by interest rate differentials will face more severe profitability challenges due to the implementation of interest rate liberalization and the impact of Internet finance.It is necessary to study the profitability factors of Chinese commercial banks. This study aims to determine the impact of internal and macroeconomic variables profitability of Chinese commercial banks by using Multiple linear regression method with data from March 2018 to February 2023. There are four independent variables in this study, represented by Capital adequacy ratio, Proportion of non-interest income ratio, Gross national product and Consumer price index.The survey objects are all commercial banks in China, and a total of 60 observation data units are generated. The research results show that Gross national product and Consumer price index have no significant impact on Return on equity. Among these independent variables, Capital adequacy ratio is the variable with the most significant impact on Return on equity.