Research on Competitiveness Measurement of Commercial Banks: The Case of Listed Commercial Banks in China

Abstract

Under the current complicated economic and financial situation, commercial banks are in a critical period of reform and transformation. This study investigated the competitiveness measurement of commercial banks in China. The study puts forward that the core competitiveness of commercial banks can be embodied in two aspects: realistic competitiveness and potential competitiveness. The bank competitiveness index composed of four indicators, namely solvency, operational capability, profitability and development capability, as well as and an analysis framework of bank competitiveness factors are established to build a competitiveness evaluation index system. Taking the data of 14 representative commercial banks in China from 2006 to 2015 as analysis samples, the paper analyzes the core competitiveness of commercial banks and its changing trend. The findings of the study show thatChina's banking industry has also achieved prosperous development in the past 20 years, but its development and competition model is to enhance its overall performance by improving asset size, asset quality and liquidity to obtain interest rate income. In the future, Chinese banks need to gradually realize a shift in drivers from traditional, low-end factors to high-end factors to enhance their competitiveness. Firstly, the business income structure should be transformed to a profit model that gradually relies mainly on intermediate business income; secondly, future competition should rely more on technological innovation and business innovation. Technological innovation will promote banks to achieve sustainable and benign development, and it play an increasingly important role in the future competition of banks.