A Study On Market Positioning Of The Rural Banks In Shandong Province

The establishment of the rural bank is an innovation of rural financial reform in ourcountry. It is also a new system arrangement financial supervision departments take toachieve long-term coordinated development of rural economy. Since its birth, rural bankhas attracted wide attention from the society. On the basis of market positioning theory,this study analyzes the current situations of the rural bank in our country. Meanwhile,with the use of comparative analysis, normative analysis and empirical analysismethods, it also explores the probable influencing factors of rural bank’s marketpositioning after description of its market positioning status in Shandong province. Thisstudy further demonstrates empirically operating performance under rural bank’s currentmarket positioning strategy, with the aim to test whether the current market positioningof rural bank can realize sustainable development of its business.The thesis consists of five parts: the one is the general analysis of the rural bankmarket positioning (Chapter1,2), including introduction, the definition of relatedconcepts and theoretical explanation; the two is the analysis of the current situations ofthe rural bank (Chapter3), which mainly describes the background and development ofrural bank and nationwide ones are compared from four aspects; the three is the analysisof the current status and influencing factors of rural bank market positioning (Chapter4,5). Mainly on the basis of market positioning theory, this section explores in depthcurrent status of rural bank market positioning from the three aspects of the targetcustomers, operation area and business products, while using the method of normativeand empirical analysis, analyzes the influencing factors of the rural bank marketpositioning; the four is the analysis of operating performance of rural banks (chapter6),mainly empirically from two aspects of the effectiveness and efficiency; the five is theconclusions and suggestions (Chapter7). Based on the above analysis, this sectionfurther refines the above arguments and summarizes the whole paper.The study arrives at the following main conclusions:(1) The rural bank market positioning strategy accords with the original policy, andrealizes sustainable development. By the end of2011, the proportion of agriculture-related loans to total loans ofShandong rural banks has reached74%，and this ratio of58.06%rural banks exceeded90%. Rural bank, through the issuance of agriculture-related loans, has achieved thepolicy objectives of serving local rural economic construction and providing financialservices to the "rural economy, rural development and rural demography ". Theempirical analysis of operating performance finds high safety of rural banks business,but because of high concentration of loans and deposit-loan ratio, they are also facedwith certain risks. The rural bank’s overall profitability is in an upward trend, showingstrong subsequent development ability. Long-established rural banks have brought"excess profits” to shareholders. The empirical analysis of X-efficiency finds that, dueto the commercial operation, the allocation efficiency of rural bank is generally high,and in a state of increasing returns to scale.(2) Rural bank targets farmers or Small and Medium-sized and micro enterprises.As commercial financial institutions, rural bank combines the rural financialsupply and demand situation with its own characteristics, and in accordance with thebusiness logic, locates its main service object at large farmers or Small andMedium-sized and micro enterprises. Meanwhile, Financial Symbiosis Theory holdsthat as a “small” bank, rural bank and farmers or Small and Medium-sized and microenterprises, which also belong to the "small customers ", have strong financialsymbiotic degree. The greater Loan balance to farmer household, on the one hand, iscaused by the large productive capital needs of farmers and on the other, because theregistered capital of rural bank grows larger, the maximum loan balance to the sameborrower is increasing.(3) The operation area of rural bank appears a certain deviation from policyintention.Nationally,41.04%of the rural banks are located in the eastern developedprovinces, and in terms of Shandong,48.57%in the eastern developed cities andcounties.76.76%business outlets of Shandong rural banks are situated in the countyseat or municipal district, while outlets in villages and towns are all branches of ruralbanks. The main sponsors tend to lay business outlets at more economically developedregions. In corporate management area, coverage of65.71%of rural banks is above the provincial average. The fact that rural banks are established in the areas with fiercemarket competition and not in the counties and cities with weak market competition, toa certain extent, deviates from the building principle of underdeveloped county first andthe developed second, and the building aim to raise coverage in rural areas andstrengthen competition in financial markets.(4) Business product of rural bank has few varieties, alienation appears in theInterbank deposit business and channels to obtain capital are limited.Rural bank funds are mainly used for the loan and deposit with other banks.Discount, investment and other business are rarely carried out. Guarantee loanpredominates, while mortgage loan and pledge loan are less, and credit loan and jointguarantee loan are even less. For the Interbank deposit business which aims to facilitatethe settlement of funds, alienation appears in the practice of rural bank. Interbankdeposit business has become the main method to achieve capital fluidity, gain profit andrealize the income maximization. Because poor banking payment and clearing systemrestricts rural bank from entering interbank lending market, and there exist manyconstraints to further loan to agriculture, rural banks can only obtain capital fromlimited channels. In the presence of a shortage of funds, rural bank can only rely on themain sponsor. Intermediate business of rural bank is subject to many restrictions, so thebusiness volume is at a low level.(5) Rural banks are acted as a tool to transfer risks by the main sponsor.In the resale of financial assets and rediscount business, the main sponsor acts asan important role: with the convenience of controlling rural bank, the main sponsortakes advantage of these businesses to transfer risks to rural bank and meanwhilemaximize their own interests. The main reason is that shareholding proportion of mainsponsors is higher and higher, sometimes in a position of majority shareholding, or evencomplete control. This phenomenon endangers the independence of rural bank. Ruralbank is reduced to the "tools" of main sponsors.