Thoughts On The Several Major Development Strategy Of China’s City Commercial Banks

Bank loans,as one of indirect financing, occupy the dominant position in capital flows, and in China’s banking system, the state-owned commercial banks and the national joint-stock commercial banks have a very large share. City commercial banks as the third tier banking system have been weak of capital, scale, marker share and so on; but by virtue of quantity, greater efforts to the SMEs, the low cost of bankruptcy,city commercial banks will continue to exist. But under the challenge of the state-owned banks, joint-stock commercial banks and foreign banks, the city commercial banks how to break through, and get a place?City commercial banks must search for its own development strategy, and development strategy is a series of about overall, long-term planning of the system which focused on the future and development, and pursue long-term survival and overall sustainable development. Commercial bank development strategy not only proclaims the values and development direction to the market and social, but also unites the managers’ thought and inspires the staff. And development strategy for small and medium banks are not dispensable. Considering the restrictions of scale, china’s city commercial banks should make full use of the small size as a strategic weapon, and use the strategic planning, marketing skills and developing the new product, and then, city commercial banks could exist in the highly competitive market.Different classification criteria, are also different types of development strategies, and this paper takes the document’s classification which formulated by China Banking Regulatory Commission, and including the strategy of M & A, Cross-regional development. And based on the banks’operating situation, we choose the strategy of IPO and growth in vivo to illustrate this problem.The strategy of the city commercial banks’ M & A research the banks’ M & A by case study in the market competition mechanism, in order to control the power to use or some other kind of purpose. The strategy of Cross-regional development constituted by the three models:the narrow cross-regional development, set branches of cross-regional and the generalized cross-regional development. But the strategy of Cross-regional development is still in the exploratory stage:the majority banks belong to the narrow cross-regional development, the branches’ size and number are still in the minority, and the generalized cross-regional development have been in the theory stage. The strategy of IPO select the Ningbo bank and Nanjing bank as the case to study the feasibility and necessity of IPO, and raise some related issues which should be noted. However, the applicability of the strategy has some limitations. First, the city commercial banks must be meet some conditions and approval by the SFC. Second, the city commercial banks of IPO have not broken the conflict between the scale and bank capital.The strategy of growth in vivo, in short, is that a specific city commercial banks adopted a series of reform measures in order to achieve the development, and detailed explanation, is that city commercial banks by introduction of strategic investors or by changing the bank’s business strategy seek a breakthrough in banking, so as to enlarge and strengthen internal integration strategy for the bank. And The strategy of growth includes the introduction of strategy investors mode and community bank mode.The four development strategies are not exist in isolation, and they can exist and develop crossing. However, in the use of these development strategies must pay attention to some issues, such as positioning in the market, city commercial banks must be served the local economy, small and medium enterprises and urban residents, and so on. And this article has repeatedly emphasized that, no matter what kind of development strategies city commercial banks use, the development strategy must be based on the actual situation of their own conditions.