AN EMPIRICAL ANALYSIS OF THE FACTORS AFFECTINGTHE NON-PERFORMING LOAN RATE OF CHINESECOMMERCIAL BANKS

Abstract

China's commercial development is growing rapidly. Despite economic growth, infact, there are banks in China whose non-performing loan rate is increasingyear byyear. Non-performing loan is an important factor leading to financial crisis. Therising rate of non-performing loan threatens the steady development of our economyand the development of commercial banks. Therefore, in this paper, Researcheranalyze the factors that affect the non-performing loan rate of China's commercial banks, which is of great significance to solve the problem of non-performingloanofChina's commercial banks. In this study, a quantitative research method was usedtoselect two data of ten Chinese commercial banks from 2012 to 2017. By citingtheexisting research results at home and abroad, the author finds that most domesticresearchers choose macroeconomic aspects. This paper attempts to explorethefactors that affect the non-performing loans of commercial banks frommacro-economic and micro-economic aspects. Empirical analysis shows that returnon assets and reserve coverage have a significant negative impact on non-performingloans; net interest rate has a significant positive impact on non-performingloans; GDP growth rate and money supply have no significant impact on non-performingloans.