RESEARCH ON FACTORS INFLUENCE THE PROFITABILITY OF CHINESE COMMERCIAL BANK

Abstract

This research aimed to examine the determinants of the commercial bank profitability in China.There are five independent variables, one dependent variable in this research .This research used the observation data ,the purposive in this study ,which are being examined by descriptive statistical analysis, classical assumption test, multiple linear regression, and hypothesis testing. In selecting the observation data, the purposive sampling method and panel data are being used in this research, where the data were collected from Eastern Fortune Network and National Data Network. Adopting quantitative research and has 63 units of observation data from 9samples from 2012– 2018 from Eastern Fortune Network and National Data Network. By using panel data and spss to quantitatively detect and analyze this research, the researchers found that the operating expense ratio, debt to equity ratio and GDP growth ratio have no significant impact on the income of Chinese commercial banks. Cost income ratio and interest rate have a significant impact on China's commercial banks profitability. The result reveals the value of adjusted R-squared among cost in come ratio, operating expense ratio, debt to equity ratio, GDP growth ratio and interest rate is 48.1%.The study indicate that commercial banks in China can increase the profitability of commercial banks by increasing cost income ratio and interest rate.