THE INFLUENCE OF MACROECONOMIC FACTOR AND FINANCIAL RATIO TOWARDS NON-PERFORMING LOAN IN CHINESE COMMERCIAL BANK

Abstract

The commercial environments in China are more diverse, even though the economic is growing up than before, seems everything goes well. Actually the commercial banks non-performing loans are increasing. Non-performing loans are the leading indicator of the financial crisis, the rising non-performing loan ratio has seriously threatened the sustained and steady development of our economy. So be analysis of the influence towards non-performing loans of commercial banks is important practical significance for solving the bank’s problem. This research aims to find the factors that influence the non-performing Loan in Chinese commercial banks. This research is quantitative research method by using secondary data taken from year 2007~year 2016 from 6 commercial banks. Through the previous research results both from domestic and foreign, the researcher finds that most domestic researcher focus on macroeconomic, and it is rare to examine the influence of the internal bank's on the non-performing loan ratio. The researcher try to explore the influencing factors of the non-performing loan of commercial banks from the macroeconomic and internal bank's financial ratio. The results of the empirical analysis: return on asset and provision coverage ratio has a significant negative influence towards the non-performing loan; net interest margin and bank asset size have a significant positive influence towards non-performing loan. The influence of GDP growth rate towards non-performing loan is not significant.