| Summary: | 碩士 === 雲林科技大學 === 財務金融系碩士班 === 99 === This study is aimed to analyze the effect of interest rate level on the profitability of State-owned banks and private commercial banks. The sample includes domestic 8 State-owned banks and 18 Commercial banks of year 2002 to 2010. This thesis further divides the sample by periods of financial crisis and by the level of interest rates. There are two major findings. First, State-owned banks focus on traditional loan and deposit business. Net income will increase when interest rates rise and net profit will decline when interest rates decline. However, changes in interest rates will not affect interest income significantly. Second, for private commercial banks, Net non-interest income and interest rate have inverse relationship. Net non-interest income to interest rate changes is affected with a greater extent in commercial banks than in state-owned banks. This is due to the investment cost and willingness to investment is influenced by interest rates changes. In summary, Interest rates change will affect net profit of commercial banks negatively, but no significant effect on interest income in private commercial banks.
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