Ownership Structure and Bank Performance in China: Does Ownership Concentration Matter?

Abstract

This research investigates the relation between ownership structure and bank performance. We choose a sample of 49 large Chinese banks of different types over the 2003-2008 periods and evaluate the impact of the largest shareholder. Using ROA (Return on Assets) and ROE (Return on Equity) as profitability measures, the results show that there is no obvious correlation between ownership structure and bank performance in general, although state-owned commercial banks (SOCBs) might present a quadratic relationship with ROE. However, for joint-stock commercial banks (JSCBs) and city commercial banks (CCBs), we did not find such relationship.