Analysis On Cross-region Operation And Urban Commercial Banks’ Efficiency

As “the third echelon” in the current banking system of our country, urbancommercial banks had been supervised by region. After the surveillance wasloosened in2006, Shanghai bank was allowed to open the first allopatric branch andcarry out all kinds of cross-region business among all urban commercial banks. Inrecent years, the pace of cross-region expansion is getting faster and faster, mosturban commercial banks are engaging in this “happy enclosure”movement, and tryingto get some market share. Following this fast movement of cross-region expansion,some problems, such as the deficit situation of some branches of some banks, theincreasing internal risks of some banks and the severe shortage of talented employees,etc, has begun to reveal gradually. How to enhance the efficiency of urbancommercial banks in the process of cross-region development is a serious problem.And solving this problem has great significance on the promotion of the holisticcompetitiveness of urban commercial banks and the sustainable development of urbancommercial banks.This paper takes the fast cross-region expansion of urban commercial banks asthe researching background, employs the theory of banking efficiency as analyzingmethod, refers to the existing achievement of some foreign and domestic researcherson the question “how the bank’s efficiency could be affected by the cross-regionoperation” and the current situation of the cross-region operation of urban commercialbanks, points out the modes for cross-region operation of urban commercial banks andthe problems they have. The key of this paper is to introduce an empirical analysis forthe change of the bank’s efficiency under different mode of cross-region operation,figure out the elements which affect bank’s efficiency, sum up proposals for theimprovement of urban commercial banks’ efficiency under the cross-region operatingmode in the end.This paper selects some data from several banks whose development has fairrepresentativeness in urban commercial banks, empirically analyzes the change ofurban commercial banks’ efficiency after cross-region operation with DEA model, in final, sums up several important factors from which cross-region operation can affectbank’s efficiency. The conclusion is:(1) cross-region operation does encourage thefast accumulation of banks’ asset, increase its power and promote its efficiency;(2) notall urban commercial banks are suitable for cross-region operation, and there’reseveral mode for cross-region operation, which means, for the target of improvingbank’s efficiency effectively, urban commercial banks should find a suitablecross-region operation mode by considering the its own characteristics. In the end,this paper dedicates some proposals for the improvement of urban commercial banks’efficiency under cross-region operation scheme, by combining the results oftheoretical and empirical analysis.