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Study On Cross-region Business Model Of China’s City Commercial Banks

Posted on:2013-01-11Degree:MasterType:Thesis
Country:ChinaCandidate:H LiangFull Text:PDF
GTID:2249330377453974Subject:Finance
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The city commercial banks of China are from the former urban credit cooperatives, which have gone through three developing stages, including city letter agency, urban cooperative banks and city commercial banks. City Commercial Bank is the third echelon of China’s banking industry, ranking behind the large state-owned banks and joint-stock commercial banks.By the end of2011, total assets of city commercial banks have occupied8.8%of the total assets of banking industry, which is far below the assets of large state-owned banks and joint-stock banks. But in the growth rate of asset size, operating results, as well as anti-risk capability indicators, the City firms perform significantly higher than the large commercial banks and average level of national banking industry. These data show a good trend of development of city commercial banksIn the early days, the business of City commercial banks was strictly limited to its local city. With the development of the city commercial banks, government gradually relaxed the limitations of cross-region business of city commercial banks. In2006, the Ningbo Branch of the Bank of Shanghai opened, which was the symbol of the official start of inter-region business of the China’s city commercial banks. Since then, the cross-region operation and development of city commercial banks started to speed up. Some banks have even started cross-border business.The main business model of cross-region development of city commercial banks are given as below:establishment of branches in different places directly; consolidation and reorganization; offsite shares; the acquisition; other modes.By directly setting up branches in different places, city commercial banks can quickly obtain the own planning of the regionalization of business requirements, but this model requires high in all aspects of city commercial banks. Consolidation and reorganization mean the joint reorganization by the Joint City Commercial (City letter agency) within an administrative region or economic zone to reach full operation in the region, including both the merger and the new merger. City commercial banks also can achieve inter-region business indirectly by off-site acquisition or equity participation in such a way. Each model has special advantages and difficulties, as well as the applicable conditions. City commercial banks have to choose their own model or combination of models according to their own needs and development plan to achieve cross-region businessThe business strategy of the cross-region SWOT analysis of Nangchong City Commercial Bank is carried out and policy recommendations are given in this thesis.The city commercial banks have also revealed many problems and risks in the process of inter-region development, such as blind expansion; management difficulties, the failure of internal controlling mechanisms and external auditing mechanisms; loss of geopolitical advantages; serious homogenization of the business; constraints by the human resource and IT. To solve these problems, city commercial banks need to certify their own market position. City commercial banks should not blindly move closer to the big banks, compete for customers and resources with those banks. Instead, City commercial banks should run the business based on their own positions, local economy, small-size and medium-size markets, implementation of differentiated business line, enhancement in the risk control, and finally enhancement in the human resource efforts and financial innovation...
Keywords/Search Tags:City commercial bank, Regional business operation, Consolidation and reorganization, SWOT analysis method
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