Computational Path and Risk Analysis of Performance Changes of Chinese Listed Commercial Banks under Diversification of Interest Rate Marketization

Against the backdrop of China’s largely completed interest rate marketization, diversification is considered to be an important tool that can diversify risks while improving the efficiency of capital use. In this paper, 25 listed commercial banks are selected as the research object, and then the panel data of these banks are collected from 2012 to 2023, and the panel model is used as a computational path to analyze the change of bank performance, and the model is used to analyze the impact of diversified operation on bank risk. The study uses the Herfindahl index as a measure of bank diversification and conducts regression analysis for different types of banks separately, and the results show that diversification of commercial banks can have an impact on their performance. Diversification increases the performance of small and medium-sized joint-stock banks, but decreases the performance of large joint-stock banks. Diversification does not have a significant impact on risk for both large and small and medium-sized banks. In response to the empirical results, this paper suggests that at the macro level, the regulator should strengthen the supervision of off-balance sheet business of banks while gradually relaxing the restrictions of the separate business system. At the micro level, banks should take the initiative to increase the diversity of assets, develop non-interest income, and provide more comprehensive financial services to customers.