Bank Profitability Analysis in China: Stochastic Frontier Approach

China’s banking system has a relatively high level of state control, while an important task in regulating the is to manage profitability banks. Using stochastic frontier approach assess commercial banks not only allows for bank’s ability generate profits relative leading industry be assessed but also takes into account specifics management technologies used and influence market environment. This article analyzes Chinese period 2012–2020 using from position central bank. The analysis perspective imply focus on most regarding best practices trends changing overall profitability. Analysis may interest regulators researchers. In general, demonstrates profit efficiency cost efficiency, although dynamics these indicators are negative. reason negative decrease economic growth rate economy, instability financial ongoing reforms. State-owned becoming highly profitable, national joint-stock facing increasing competition reducing City rural maintain due support.