THE INFLUENCE OF FINANCIAL PERFORMANCE ON THE PROFITABILITY OF STATE-OWNED COMMERCIAL BANKS IN CHINA

Abstract

This research has studied the influence of financial performance on the profitability of state-owned commercial banks, and the purpose of this report is to find out the influence of China's bank financial performance such as Non-Performing Loans(NPL), Net Interest Margin(NIM), Capital Adequacy Ratio(CAR) and Total Assets(TA) on the profitability of China's state-owned commercial banks from 2010 to 2017. Quantitative research, F-test, T-test and R square are used to analyze financial performance to return on assets. The researcher used multiple regression to analyze the influence of financial performance of China's commercial banks on profitability from 2010 to 2017. There are 40 groups of sample data from five state-owned commercial banks (ICBC, ABC, BOC, CCB and BCM). According to regression analysis, during the period 2010 to 2017, Capital Adequacy Ratio has no significant influence on profitability, while Non-Performing Loans, Net Interest Margins and Total Asset have great significant influence on the profitability of China's state-owned commercial banks.