Risk Evaluation of Chinese-Listed Urban and Rural Commercial Banks

After three decades of development, China's urban and rural commercial banks have become an indispensable and essential part of China's banking sector. In recent years, urban and rural commercial banks have experienced frequent outbreaks of risk events under the dual pressures of weak internal risk management and the external downturn of China's macro-economy. In this paper, we first show the correlation between bank risk and risk management through a literature review, summarise the current situation and deficiencies of risk management in urban and rural commercial banks, and collate financial indicators suitable for evaluating the level of risk and risk management ability. Then, we design models and scoring criteria to evaluate the listed urban and rural commercial banks in China, summarise the overall risk level, and identify the banks and areas with significant risk potential. Finally, based on the conclusions, recommendations regarding bank risk are made to the government, the banks' investors, clients, employees, senior managers and boards of directors.