What Determines Interest Margins? The Case of Chinese Banks

Ming Qi () and Jiawei Zhang
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Ming Qi: China University of Petroleum (Beijing)
Jiawei Zhang: China University of Petroleum (Beijing)

Chapter Chapter 11 in Contemporary Issues in Banking, 2018, pp 239-251 from Palgrave Macmillan

Abstract: Abstract In this study, a sample of 116 Chinese domestic banks, comprising state-owned banks (SOBs), joint-stock banks (JSBs), city commercial banks(CCBs) and credit cooperatives, is used to investigate the interest margins of China’s banking industry. The results indicate that the credit risk is the major factor in enhancing the profitability of the Chinese domestic banks. On the other hand, the banks require high interest margins to compensate for the liquid, default and credit risk exposures. Following the liberalization of the banking industry, domestic banks do not hold as many liquid assets and loan loss provisions as before.

Keywords: Chinese banks; State-owned banks; Joint-stock banks; City commercial banks; Credit cooperative; Interest margins (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-90294-4_11

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DOI: 10.1007/978-3-319-90294-4_11

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