The Strategic Positioning Of China's City Commercial Bank Development

As a product of monetary system reform, city commercial bank is a joint-stock commercial bank which sets up in the foundation of urban credit cooperatives. After many years'development, city commercial bank has made a positive contribution for melting finance risk of original urban credit cooperatives, guaranteeing the stability of society, economy and finance. This article makes every effort to explore the strategic positioning of the city commercial bank development through scientific analysis and rigorous proof.As introduction, the first chapter introduces the topic background and the theory and practical significance, proposes writing mentality and the innovation in the foundation of enumerating the research results of the city commercial bank strategy in detail. Through applying theory to reality and a method of comparative research, this article analyzes the sustainable development strategy of city commercial bank in the foundation of the developing experience of overseas small banks, and proposes a long-term, sustainable strategic way to the city commercial bank development from a macroscopic angle.The problem emerging in the developing process of city commercial bank is divided into five aspects in the second chapter of this article. First, introduces the connotation of city commercial bank, city commercial bank is a local joint-stock commercial bank which was authorized by the State Council, invested by enterprises, inhabitants and local authority in the foundation of consolidating urban credit cooperatives in order to serve a certain city. Next, city commercial bank is playing a vital role in our finance system, not only because it melts urban credit cooperatives'financial risk, promotes a healthy development of the industry, but also because it has realized a system innovation, consummates our financial system. In addition, city commercial bank displays a role of financial leverage through carrying out retail business, guides social fund to support the small and medium-sized enterprises development, and plays a vital role in promoting local economy development. Third, in order to elaborate city commercial bank's context better, this chapter divides the city commercial bank's developing history into three stages as the difficult start, the management promoting section and the accelerating process. Fourth, this chapter has proven the market position and competitive power of city commercial bank through the property share analysis and debt share analysis. Finally, although city commercial bank demonstrates a strong vitality in the intense market competition, its further growth is restricted because it is not able to get rid of the problem when it leaves the womb in the urban credit cooperatives, and causes new problem in its developing process. These issues are as follows: First, its internal governance structure is imperfect because of the local authority holdings. Second, the property of city commercial bank cannot reach the capital adequacy ratio. Third, the People's Bank limits the management region of city commercial bank. Fourth, the market positioning of city commercial bank is not clear. Fifth, its service innovation ability is not strong.In order to explore the reference for our city commercial bank, it is necessary to introduce the development condition of overseas small banks before proposing the strategic positioning for city commercial bank. Community Bank in the USA is a commercial bank which established in a specific scope and operated independently, in order to provide personalized service for the local small and medium-sized enterprises and individual customers, and maintain a long-term business relation with customers. Although the quantity of small bank in England is few, they hold a certain space in the market as they pay attention to the retail business, and continuously develop and promote new products. Overseas small banks mainly provide financial service to local families, small and medium-sized enterprises and peasant households, concentrate themselves on the community financial business. In order to make use of their information superiority, small banks will absorb deposit from local area, then invest it into this area again, so as to promote local economic development. They can also avoid information asymmetry problem when examine loan for small and medium-sized enterprises and families. The overseas small banks have provided a precious experience to our city commercial bank, for example, first, the small banks has positioning superiority because they consider the small and medium-sized enterprises and the community inhabitants as goal clients. Second, the small banks practice of absorbing deposit from local area, then investing it into this area again obtains support from the local government and inhabitants, thus establishes area superiority. Compared to big ones, small banks have superiority in collecting customer information, which can help them avoid information asymmetry and reduce non-performing assets, finally, because focusing on retail business, small banks can not only avoid high cost, but also provide service with high quality and low price than big ones.The fourth chapter of this article elaborates the strategic positioning of city commercial bank development. On the one hand, it is necessary for city commercial bank to make clear about its market positioning. First, it should focus itself on local economy, make service for the infrastructure construction, the development of the small and medium-sized enterprises and the readjustment of local economy, play an important role in providing advisory for local authority and residents, dedicate itself to the local economy development. Second, it should make service for the small and medium-sized enterprises. This is not only the inevitably request for itself to obtain development, but also an effective way to solve the small and medium-sized enterprises financing difficulties. Third, it also should realize inter-regional development in the foundation of basing on local economy. Inter-regional development is a double-edged sword, which can both bring new opportunity and new challenge, therefore, it is necessary to pay attention to the following two points, one is that inter-regional development should be a spontaneous demand for city commercial bank, the other is that inter-regional development should focus on introducing advanced management and operation model, the risk management system and the service innovation. Forth, city commercial bank should carry out the internationalization strategy. It can set its goal on internationalization of service and management, approach international standard step by step through improving service, enhancing employees'quality and promoting management and operation level. On the other hand, it is necessary for the city commercial bank to expand its business and make every effort to innovate. First, it can develop retail business and intermediary business through carrying out personal financial services, bank card and internet banking business and improving agency business. Then, it should carry on financial innovation, devotes itself to the product innovation which based on making serve for residents and the small and medium-sized enterprises, service innovation which based on the customer and technical development which based on the technological development. It is also necessary to pay attention to the following issues in the innovation process, one is that innovation must be in light of the actual. The other is that we should focus on marketing the new product. Moreover, in order to guarantee the city commercial bank development, it is necessary to carry out comprehensive risk management. In addition, city commercial bank should also establish the modern enterprise system in the foundation of improving corporate governance and strengthening controls from inside. When all these are well done, we can consider starting the listing process for city commercial bank.