IDEAS home Printed from https://ideas.repec.org/a/kap/rqfnac/v16y2001i2p149-70.html
   My bibliography  Save this article

Comparative Performance of Chinese Commercial Banks: Analysis, Findings and Policy Implications

Author

Listed:
  • Li, Shanling
  • Liu, Feng
  • Liu, Suge
  • Whitmore, G. A.

Abstract

This paper investigates the financial performance of Chinese banks by using financial ratio analysis. The analysis shows that the low profitability of state-owned commercial banks results from their higher ratio for non-interest expenses and lower interest margin than joint-equity banks. The much lower profit margin in state-owned banks draws down their levels of ROE and ROA, even with the offsetting effects of more efficient utilization of their assets and higher financial leverage. Although data limitations prevent us from studying the risk profiles of the banks in detail, it is clear that these Chinese banks generated lower returns with higher financial risks than their Western counterparts. The paper concludes with a discussion of major issues affecting Chinese bank performance. Significant difficulties encountered in assessing bank performance are also identified and discussed. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • Li, Shanling & Liu, Feng & Liu, Suge & Whitmore, G. A., 2001. "Comparative Performance of Chinese Commercial Banks: Analysis, Findings and Policy Implications," Review of Quantitative Finance and Accounting, Springer, vol. 16(2), pages 149-170, March.
    • Handle: RePEc:kap:rqfnac:v:16:y:2001:i:2:p:149-70
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0924-865X/contents
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ho, Chun-Yu, 2012. "Market structure, welfare, and banking reform in China," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 291-313.
    2. Chien-Chiang Lee & Meng-Fen Hsieh, 2013. "Beyond Bank Competition and Profitability: Can Moral Hazard Tell Us More?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 44(1), pages 87-109, August.
    3. Daley, Jenifer & Matthews, Kent, 2009. "Measuring bank efficiency: tradition or sophistication? - A note," Cardiff Economics Working Papers E2009/24, Cardiff University, Cardiff Business School, Economics Section.
    4. Subal Kumbhakar & Dan Wang, 2007. "Economic reforms, efficiency and productivity in Chinese banking," Journal of Regulatory Economics, Springer, vol. 32(2), pages 105-129, October.
    5. Wanke, Peter & Tsionas, Mike G. & Chen, Zhongfei & Moreira Antunes, Jorge Junio, 2020. "Dynamic network DEA and SFA models for accounting and financial indicators with an analysis of super-efficiency in stochastic frontiers: An efficiency comparison in OECD banking," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 456-468.
    6. Yüksel Akay Ünvan & Cansu Ergenç, 2022. "Financial Performance Analysis with the Fuzzy COPRAS and Entropy-COPRAS Approaches," Computational Economics, Springer;Society for Computational Economics, vol. 59(4), pages 1577-1605, April.
    7. Kai Du & Andrew C. Worthington & Valentin Zelenyuk, 2015. "The dynamic relationship between bank asset diversification and efficiency: Evidence from the Chinese banking sector," CEPA Working Papers Series WP122015, School of Economics, University of Queensland, Australia.
    8. Mokhamad Anwar, 2010. "Cost Structure In Indonesian Islamic Banks: (Case on PT. Bank Syariah Mandiri and PT. Bank Syariah Mega Indonesia)," Working Papers in Business, Management and Finance 201008, Department of Management and Business, Padjadjaran University, revised Aug 2010.
    9. Berger, Allen N. & Hasan, Iftekhar & Zhou, Mingming, 2009. "Bank ownership and efficiency in China: What will happen in the world's largest nation?," Journal of Banking & Finance, Elsevier, vol. 33(1), pages 113-130, January.
    10. Mokhamad Anwar, 2010. "Cost Components as Predictors for the Profitability of sharia Banks : (Study on PT. Bank Syariah Mandiri and PT. Bank Syariah Mega Indonesia)," Working Papers in Business, Management and Finance 201009, Department of Management and Business, Padjadjaran University, revised Sep 2010.
    11. Berger, Allen N. & Hasan, Iftekhar & Zhou, Mingming, 2007. "Bank ownership and efficiency in China: what lies ahead in the world's largest nation?," Bank of Finland Research Discussion Papers 16/2007, Bank of Finland.
    12. Memić Deni & Škaljić-Memić Selma, 2013. "Performance Analysis and Benchmarking of Commercial Banks Operating in Bosnia and Herzegovina: a DEA Approach," Business Systems Research, Sciendo, vol. 4(2), pages 17-37, December.
    13. Worthington, Andrew C. & Zelenyuk, Valentin, 2018. "Data envelopment analysis, truncated regression and double-bootstrap for panel data with application to Chinese bankingAuthor-Name: Du, Kai," European Journal of Operational Research, Elsevier, vol. 265(2), pages 748-764.
    14. Daley, Jenifer & Matthews, Kent, 2009. "Efficiency and Convergence in the Jamaican banking sector 1998-2007," Cardiff Economics Working Papers E2009/30, Cardiff University, Cardiff Business School, Economics Section.
    15. Mei-Hui Wang & Tai-Hsin Huang, 2009. "Threshold effects of financial status on the cost frontiers of financial institutions in nondynamic panels," Applied Economics, Taylor & Francis Journals, vol. 41(26), pages 3389-3401.
    16. Berger, Allen N. & Hasan, Iftekhar & Zhou, Mingming, 2007. "Bank ownership and efficiency in China : what lies ahead in the world's largest nation?," Research Discussion Papers 16/2007, Bank of Finland.
    17. Daley, Jenifer & Matthews, Kent & Zhang, Tiantian, 2011. "Post-crisis cost efficiency of Jamaican banks," Cardiff Economics Working Papers E2011/27, Cardiff University, Cardiff Business School, Economics Section.
    18. Rasoul Rezvanian & Rima Turk Ariss & Seyed Mehdian, 2011. "Cost efficiency, technological progress and productivity growth of Chinese banking pre- and post-WTO accession," Applied Financial Economics, Taylor & Francis Journals, vol. 21(7), pages 437-454.
    19. Jun Du & Sourafel Girma, 2011. "Cost economies, efficiency and productivity growth in the Chinese banking industry: evidence from a quarterly panel dataset," Empirical Economics, Springer, vol. 41(1), pages 199-226, August.
    20. Yao, Shujie & Han, Zhongwei & Feng, Genfu, 2007. "On technical efficiency of China's insurance industry after WTO accession," China Economic Review, Elsevier, vol. 18(1), pages 66-86.
    21. repec:zbw:bofitp:2009_019 is not listed on IDEAS
    22. repec:zbw:bofrdp:2007_016 is not listed on IDEAS
    23. Ho, Chun-Yu, 2012. "Market structure, welfare, and banking reform in China," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 291-313.
    24. Mokhamad Anwar, 2010. "Small Business Financing and Bank Performance : Empirical Study of Indonesian Publicly Banks," Working Papers in Business, Management and Finance 201010, Department of Management and Business, Padjadjaran University, revised Oct 2010.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:rqfnac:v:16:y:2001:i:2:p:149-70. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.