The Study Of Cross-regional Development Of Bank Of Luoyang

As a product of the reform of the financial system, city commercial banks are an integral part of China’s financial system, playing an irreplaceable role in regional economic development and SME financing. In recent years, however, with the development of the economy and the increase of intra-industry competition pressure, in order to expand the scale, to circumvent regional economy risk, and to seek greater development, city commercial banks are undergoing the change of renaming, consolidation and reorganization, cross-regional development as well as the introduction of foreign capital.Among the17city commercial banks in Henan Province, the outcomes of Bank of Luoyang cross-regional development is outstanding. This development model was not only planned out of the strategy itself, but also was an inevitable choice to comply with the economic development trends. The external necessities of cross-regional development were well reflected from the three items including free competition of the banking industry, the relevance of regional economic and the current situation of financial market, while the internal ones were demonstrated from the analysis of scale effects, risk control, brand value and the characteristics of the bank. Meanwhile, the conditions of cross-regional development had become basically mature in the following three aspects:a favorable external financial environment and supportive policy, the development of Bank of Luoyang’s own power and the improvement of technical conditions. All of these factors have ensured the cross-regional development of Bank of Luoyang, thus making it a reality.The cross-regional development has afforded Bank of Luoyang a new high stage, bringing about a historic leap, with an expansion of assets and a drastic rise of business income and net profit as well. Along with the rapid development, Bank of Luoyang has also inevitably encountered some problems and challenges such as the ambiguity of service orientation, the lack of talent pool, the relatively single business type, the more intense intra-industry competition and the rising difficulty of risk control.To solve these problems above, some solutions are mainly required as follows. Firstly, it is necessary to choose a proper market orientation for its own further development, involving a clear customer orientation based on small and medium-sized enterprise customers and a product orientation based on retail business. Secondly, the bank should carry out the strategy mainly on two aspects for talents-training with excellent comprehensive quality, involving the improvement of talent pool and promotion of the reform of personnel distribution system. Thirdly, Bank of Luoyang should go along differentiation route to minimize the degree of homogeneity of the products, and show its own characteristics in terms of pricing, products and services. Fourthly, the innovation of business as well as marketing system should be strengthened to improve the overall competitive power. Furthermore, it is essential to strengthen risk management, improve the construction of internal control mechanism and pay particular attention to the risks of SME credit business. Finally, Bank of Luoyang should strengthen the brand building, put great emphasis on the accumulation of brand effects and eventually enhance the brand value.