The empirical study of the relation between ownership structure and performance of city commercial banks in China

Abstract

In this paper we analysis the relation between of ownership structure and performance of the city commercial banks in China. In the analysis method and chooses data, we attention the comparability to the existing research literature. It is found that the higher the proportion of government shareholding and the proportion of the largest shareholder proportion, the poorer performance of the city commercial bank is, which is consistent to the existing majority literature search conclusion. We also found that foreign capital shareholding will reduce non-performing loans ratio of city commercial bank, but the proportion of shareholding did not have remarkable influence to the performance. Therefore, the city commercial bank do not have to introduce foreign strategic investors, may also introduce the high quality domestic strategic investor. In the end, The size of banks and ROE has a positive relationship, but the size of banks and non-performing loans ratio has a negative relationship, this indicates that under the existing environment, the city commercial bank should expand their own assets scale, and reduce the non-performing loan rate simultaneously.