With the slowdown of China's economic growth, the accelerated reform of interest rate marketization, the increasingly intensified trend of financial disintermediation, under the background of downward pressure on the economy, the business activities of urban commercial banks are facing a severe form. Compared with other domestic commercial banks, China's urban commercial banks have significant differences in profitability due to history, operation and management ability, local environment and other reasons. Therefore, it is a topic of strong theoretical and practical significance to explore which specific factors will affect the profitability of urban commercial banks and the extent of the impact. Factors influencing the city commercial bank profitability can be divided into internal and external, this paper assumes that the degree of assets, the credit ratio, capital strength, degree of non-interest income growth, operational efficiency and credit risk is the internal factors affect the profitability of the, while the external factors for economic development degree and the diversity of market demand. Based on the balance panel data of 10 urban commercial banks from 2013 to 2017, this paper conducts empirical analysis to verify the impact of various factors on the profitability of urban commercial banks. Based on the empirical research conclusions on the factors affecting the profitability of relevant sample city commercial banks, this paper puts forward strategies to improve the profitability of city commercial banks from five aspects: capital strength, cost management, credit risk, characteristic operation and regional economy.

Xinchen Zha. Analysis on the factors influencing the profitability of city commercial banks. Academic Journal of Business & Management (2022) Vol. 4, Issue 6: 85-93. https://doi.org/10.25236/AJBM.2022.040615.

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