Retail Banking Development Of State-Owned Commercial Banks After System's Change

Finance is the key sector of modern economy, and banks constitute the major financing channel. Just like many other different enterprises, commercial banks will do their best in the pursuit of n profit maximization. For quite a long time, state-owned commercial banks have always been criticized for their long-existing problems such as poor profitability, poor asset quality, fast growth of non-performing asset, and so on. Domestic scholars have made a number of seemingly practical proposals for the management of state-owned banks, such as how to eliminate financial risks, how to improve the quality of the non-performing assets, and so on. But little research has been done for the post-reform commercial banks as to how to raise their profits and how to develop their retail business.This paper attempts to analyze the weak points of state-owned commercial banks—retail banking. It started by examining the facts and data of domestic and foreign retail banking evolution, and conducted a comparative review of the present situation of state-owned commercial banks, so as to clarify the profound significance of expanding retail banking business for the purpose of enhancing the present profitability and overall competitiveness of state-owned commercial banks.Through expounding the feasibility and the necessity of expansion of retail banking at state-owned commercial banks, the paper proposed that a strategic transformation commercial from a unitary banking system to an comprehensive financial business system. Furthermore, the paper argued that retail banking business of state-owned commercial banks should rely heavily on "private banks" sector in the future.Theory and practical experience are well combined in this paper. The paper is based on the traditional monetary and banking theories concerning commercial papers and income anticipations, and draws a lot on the experience of foreign commercial banks in their retailing business. The paper made use of many traditional methods and metrological model to analyze the status quo of commercial banks in their retailing business, as well as the opportunities and challenges they are facing. All the policy proposals are based on theoretical and experimental analysis so as to make them more scientific and reasonable and contribute to a coordinated development of our retailing banking business.The paper is divided into five parts:1. In part one the paper posed some questions, defined the retail business of commercial banks and made a review of relevant documents and research by domestic scholars. 2. Part two deals with the theoretical and experiment exploration by domestic and foreign banks, reviewed the development history of their retail business and analyzed the present situation, challenges and experiences of domestic banks in their development of retail business, such as the China Merchants Bank.3. Part three focused on a comparative analysis of the competitiveness and development of foreign and domestic banks. In this part the paper analyzed the reason of the deterioration of the competitiveness of domestic banks, as well as the necessity and feasibility to develop their retail business.4. Part four conducted an analysis on the strategic transformation to retailing business by the four big state-owned commercial banks, and also on the "11th Five-year Plan" of the commercial banks before a case study on a successful transformation of Lan & Spar Bank.Finally in Part five, on the basis of the analysis made in the previous parts, the paper made a series of proposals and policy suggestions for the development of retail business of our commercial banks.