Commercial Bank as a special financial enterprise, it has the basic characteristics of general business, as a business will be seeking to maximize profits. Reasonable level of profitability of commercial banks, not only is the impetus for the development of commercial banks themselves, but also the commercial banks in an invincible position in the competition incentives . While countries commercial banks there are some differences in the system, but in business, national commercial banks generally followed the profitability , liquidity and security principles.
1. Profit Principle
Profitability refers to the principle of commercial banks as a business enterprise, the pursuit of maximum profits. Evaluation is both profitable commercial bank operating level of the core indicators, commercial banks also eventually benefit reflected. Factors affecting the commercial banks' profitability indicators are mainly deposit loans , asset structure , the proportion of its own funds and financial self-sufficiency levels and funds management system and operational efficiency. Adhere to the principle of business profitability of commercial banks has Shifenzhongyao significance.
First, only to maintain the desired level of profitability of commercial banks to replenish their capital and expand the operation scale, and in order to enhance the strength of banks and improve the bank's competitiveness .
Second only to maintain the desired level of profitability, in order to enhance the credibility of the banks. Banks ideal level of profitability, indicating that banks well managed, can enhance customer confidence in banks, in order to attract more deposits, increase funding, against certain business risks .
Third, only to maintain the desired level of profitability, in order to maintain and improve the competitiveness of commercial banks. Today's competition is the talent competition. Increasing the profitability of banks, before we take advantage of high salaries and generous benefits to attract more talents. At the same time, only maintain the huge level of profitability, the banks have the ability to regularly carry out technological transformation , updating equipment, and strive to improve work efficiency , enhance its competitiveness.
Fourth, the banks maintain the desired level of profitability, not only conducive to the development of the bank itself, but also help the bank macroeconomic activity conducted. Because commercial banks to measures aimed at improving profitability, and ultimately will be reflected in the macro-economies of scale and speed of the economic structure and economic up, but also reflected the general level of market interest rates and general price level up.
2. Liquidity Principles
Liquidity refers to the commercial banks can readily meet customer withdrawals and the ability to meet customer lending. Liquidity here has two meanings, namely, liquidity and asset liability liquidity. Liquid assets refers to bank assets at any time without loss premise ability realizable . Liquidity refers to the bank debt at a reasonable cost can often absorb all kinds of deposits and other funds needed. Under normal circumstances, we are talking about liquidity refers to the former, liquidity assets. To meet customers' bank deposit withdrawals and other requirements, banks in arranging funds when, on the one hand requires the asset has a high liquidity; the other hand, must strive to balance the business structure is reasonable, and maintain a strong financing capability .
Effect of commercial bank liquidity factors are the size of the average customer deposits, the level of self-sufficiency of funds, changes of cleared funds, credit management policy , bank asset quality and capital management system and so on. Liquidity is to achieve safety and profitability of an important guarantee. As a member of the special financial companies, commercial banks to maintain adequate liquidity is essential because:
① other funding sources as customer deposits and banks borrow funds require banks to ensure at any time and repay the extract, which depends mainly on liquid assets of liquidity.
② enterprises, a variety of household and government loan demand generated at different times, but also the need for timely funding organizations to meet.
Motion ③ bank funds irregularities and uncertainties , liquidity and liabilities requires liquid assets to be guaranteed.
④ fierce competition in the banking industry, the investment risk is difficult to predict, business objectives can not be guaranteed to be fully realized, will take some liquidity as a precaution. In the course of a business bank's liquidity level is very important. In fact, excessive liquidity , the bank will lose the chance to profit or even a loss; low liquidity could lead to banks are experiencing a credit crisis , loss of customers , loss of funding sources, and even lead to a run because of bank failures. Therefore, as the commercial banks is critical to maintain appropriate liquidity. This "degree" is the lifeblood of commercial banking operations is the key to the success of the commercial banks. This "degree" is neither limited to the absolute quantity, but also in maintaining a dynamic management. This requires bank managers timely and decisive manner to seize the opportunity and make decisions. When the lack of liquidity, to replenish and increase; when the flow is too high, as soon as possible to arrange for funds to improve fund profitability .
3. Security Principles
Security principle refers to the bank's assets, income , credit, and all the operating conditions for survival and development from loss of reliability. Security is the opposite risk, security of commercial banks operating principle is as much as possible to avoid and reduce risks. The main factors affecting the security principle of commercial banks have average loan size average maturity of the loan customers, loans, borrowers sector and regional distribution as well as lending and management system. Commercial banks adhere to the principle of safety the main significance lies in:
First, the risk is the eternal problem faced by commercial banks. Banking operations can be summarized in two aspects: First, on the banks of the creditor to scheduled debt service; the second is the requirement for bank debtors scheduled debt service. This reliability is a key activity of credit bank business activities. The extent to which the reliability is confirmed, also known as deterministic. This corresponds to a risk that uncertainty. But in the business activities of the bank, due to uncertainty and uncertainty for various reasons, there are a variety of risks, such as credit risk , market risk , political risk , these risks directly affect the bank to recover the principal and interest on time, will inevitably weaken or even lose solvency of banks, endanger the safety of the bank itself. Therefore, bank managers on the risks must strictly abide by the principles of security, try to avoid risk, risk reduction and risk diversification .
Second, commercial banks' capital structure determines whether there is the potential crisis. And general industrial and commercial enterprises operating in different banks own capital small proportion. Can not meet the use of funds, which rely mainly on the absorption of customer deposits or foreign borrowing for loans or investments, debt management has become so basic characteristics of commercial banks. The capital structure is determined by the commercial bank, if the bank or the occurrence of a loss poor management, we should write off the bank's own capital to make up for the possibility of collapse at any time exist.
Third, adhere to a stable operating principle is required commercial banks to conduct business. First of all, help to reduce the loss of assets, and enhance the reliability of the expected return. Desperate blind pursuit of profit maximization, the effect is often counterproductive. In fact, only in the premise of safety operating assets, in order to increase revenue. Secondly, only by adhering to safe and sound banking, we can establish a good public image. Because the key to the world based on whether a bank is the bank's reputation, and reputation mainly from the bank's safe, so to maintain public confidence, stabilize financial order , depends on the safety management of banks. Thus, not only the principle of security of bank profitability objective premise is the basis for survival and development banks; bank management itself is not only the requirements of social development and stability needs.