THE IMPACTS OF OFF-BALANCE SHEET BUSINESS AND BANK RISK ON COMMERCIAL BANK PERFORMANCE: AN EMPIRICAL TEST OF CHINA’S A-SHARE LISTED COMMERCIAL BANKS
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Abstract
From 2008 to 2016, China’s A-share listed commercial banks are used as a sample to verify the impact of off-balance sheet business and bank risk on the performance of commercial banks. This paper adopts the CSMAR database. The sample size was 145 in total. And the annual reports of listed companies in the measurement of off-balance sheet business. Choose the ratio of fee and commission income to operating income to measure the contribution rate of off-balance sheet business income, and the variable is named OBS, which is equal to the total revenue of bank i’s (various) off-balance sheet operations in the t-the half-year divided by the bank’s operating revenue. Using regression analysis research method, the results show that: (1) the higher the off-balance sheet business, the higher the performance of commercial banks; (2) the higher the risk of banks, the lower the performance of commercial banks. Based on the above conclusions on performance, to better control the risks brought about by the diversification of commercial banks’ operations.
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