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Determinants Affecting Profitability of State-Owned Commercial Banks: Case Study of China

Peter the Great St. Petersburg Polytechnic University, 195251 St. Petersburg, Russia
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Academic Editor: Mogens Steffensen
Risks 2021, 9(8), 150; https://doi.org/10.3390/risks9080150
Received: 1 July 2021 / Revised: 6 August 2021 / Accepted: 16 August 2021 / Published: 20 August 2021
The study examines the relationship between internal determinants, external determinants and the profitability of state-owned commercial banks. We use pooled regression, fixed effect, and random effect models on the case of the top five Chinese state-owned commercial banks from 2007 to 2019. The results show that internal factors, measured by size, credit quality, and liquidity, significantly positively influence banks’ profitability. State-owned banks that have larger sizes, higher credit quality, and higher liquidity have accordingly higher profitability than other banks. On the contrary, the external factor, measured by the natural logarithm of GDP, negatively influences banks’ profitability. The decrease in GDP leads to higher profitability of state-owned commercial banks in China. Our results provide insight into the profitability of state-owned commercial banks, considering the latest changes in the Chinese banking industry. View Full-Text
Keywords: Chinese state-owned commercial banks; profitability; credit quality; liquidity Chinese state-owned commercial banks; profitability; credit quality; liquidity
MDPI and ACS Style

Koroleva, E.; Jigeer, S.; Miao, A.; Skhvediani, A. Determinants Affecting Profitability of State-Owned Commercial Banks: Case Study of China. Risks 2021, 9, 150. https://doi.org/10.3390/risks9080150

AMA Style

Koroleva E, Jigeer S, Miao A, Skhvediani A. Determinants Affecting Profitability of State-Owned Commercial Banks: Case Study of China. Risks. 2021; 9(8):150. https://doi.org/10.3390/risks9080150

Chicago/Turabian Style

Koroleva, Ekaterina, Shawuya Jigeer, Anqi Miao, and Angi Skhvediani. 2021. "Determinants Affecting Profitability of State-Owned Commercial Banks: Case Study of China" Risks 9, no. 8: 150. https://doi.org/10.3390/risks9080150

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