The Relationship between Non-Interest Income and the Performance of the Bank——empirical analysis of 40 banks in China

This paper investigates the relationship between non-interest income and performance of 40 banks in China during 2003-2007. The BankScope’s data show that both the amount and the share of Non-interest revenue increase during 2003 and 2007. Robust Standard Errors for Fixed Effects and Random Effects Panel Data Regression support that the negative relationship between Non-interest revenue and performance, measured by Return on Average Assets. While the different type non-interest revenues have different effects on performance of bank. Fee and Commissions will improve the performance while Net Gain on Investments in Securities will reduce it.