Noninterest Income and Performance of Commercial Banking in China

<table class="table-group" id="tab1"><tr><td><table class="table"><tr><td class="thead-hr" colspan="5"><hr/></td></tr><tr class="thead"><td class="align_left">Category</td><td class="align_center" colspan="2"> Variable</td><td class="align_left">Calculation of the variable</td><td class="align_left">Explanation</td></tr><tr><td class="thead-hr" colspan="5"><hr/></td></tr><tr><td class="align_left">Explained variable</td><td class="align_center">Performance</td><td class="align_center">ROE</td><td class="align_left">Net profit/net asset</td><td class="align_left">The performance of profitability</td></tr><tr><td class="align_center" colspan="5"><hr/></td></tr><tr><td class="align_left">Explanatory variable</td><td class="align_center">Noninterest income</td><td class="align_center">NIR</td><td class="align_left">Noninterest income/total operating income</td><td class="align_left">How much and how well banks carry out noninterest business</td></tr><tr><td class="align_center" colspan="5"><hr/></td></tr><tr><td class="align_left" rowspan="3"> Control variable</td><td class="align_center" colspan="2"> Bad loan ratio (BAD)</td><td class="align_left">Nonperforming loans/balance of loans</td><td class="align_left">The credit assets’ security condition</td></tr><tr><td class="align_center" colspan="2"> Capital adequacy ratio (CAR)</td><td class="align_left">Capital/risk-weighted asset</td><td class="align_left">How well the risk control ability is</td></tr><tr><td class="align_center" colspan="2"> Cost ratio (COST)</td><td class="align_left">Operating cost/operating income</td><td class="align_left">Ability of control of the cost</td></tr><tr class="table-tr"><td colspan="5"><hr class="tbody-hr"/></td></tr></table></td></tr></table>

Scientific Programming

tab1

Table 1

Table 1: Noninterest Income and Performance of Commercial Banking in China 