The Impact of the Financial Turmoil on the Major Banks of China and Their Profit-Factors Analysis

• Main Authors: Hsiao-Ching Huang, 黃小菁
• Other Authors: David Shyu
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/6fq86f

碩士 === 國立中山大學 === 高階經營碩士班 === 97 === 2008 is a special year for the global financial market. The global financial tsunami ignited from the U.S sub-prime mortgage crisis has caused Wall Street financial giants to collapse. The credit crunch in turn caused a contraction in the real economy and the world paid a heavy price for this financial tsunami. Charles Dickens quote： "It was the best of times, it was the worst of times ". Compared to European and the United States large-scale banks, China''s banks are less opened and have relatively small exposure to derivative financial products. Consequently, these barriers have led them to limit their losses and write-downs from the sub-prime mortgage crisis. This thesis studies the major China-based banks’ profitability by comparing these banks’ financial and operational structures, and correlations to several economic factors. At the same time, Fama-French three-factor model was used to verify the efficiency of the China’s stock market. The conclusions of this study are presented as follows：(a) Although these Chinese banks do have economies of scale, but the relationship between scale and profitability is not proportional. (b) Chinese banks are less affected by the financial crisis as a result of the high level of protection and control of the Chinese government, coupled with the fact that most of the Chinese banks’ core operations are net interest income (c) lending activity、 net interest margin、 and asset quality are the key drivers for Chinese banks, and these three factors are mostly negatively correlated to the economic condition. (d) Based on the regression result of the Fama-French three factors model and the result of the T test, the relation of the excess return of the Chinese banks’ Shanghai-listed A-shares to both the market value and the ratio of book to market value is significant while that of the Chinese banks’ Hong Kong-listed H-shares is insignificant.