The Case Analysis On The Profit Model Of KFQ Subranch

Commercial banks in western developed countries has formed balanced profit modelboth with interest income and non-interest income. While the profit model of commercialbanks in China is more traditional which rely on spread income and intermediate businessincome. The deepening of financial system reform, interest rate marketing and financialdisintermediation, will cause a direct impact on the traditional profit model in our country. Tomeet the new needs of economic development, as well as to innovate profit model has becomean important topic.The paper selects KFQ branch of GS commercial bank as the object. It deeply analyzesthe profit model, and proposes specific ideas and solutions which will help change KFQbranch profit model.First, the paper establishes necessary theoretical foundation, through analysis of statusquo and problems of the commercial banks profit model, as well as the way to change themodel which are all based on lots of research literature.Secondly, the paper carries on a detailed analysis of KFQ branch including its operatingcondition, profitability, profit model characteristics and problems. And then the factors aboutmarkets, institutions and human resources are comprehensively considered, to work on acomparative analysis of two profit model, in order to find suitable direction and path whichhelp transform profit model of KFQ branch.Finally, the case reveals that through transforming operating philosophy and businessmodel of commercial banks will promote the change of profit model and healthy developmentof commercial banks in China.In summary, the paper concludes that profit model of commercial banks in China is stillspread-oriented which must be adapted to form balanced profit model both with interestincome and non-interest income. Commercial banks in China should learn to providecomprehensive financial services, while not only the traditional services of deposit, loan andexchange. Furthermore, institutional protection is need to support appropriate adjustments onregulatory regime of separate operation and supervision, in order to relax restriction ofoperation scope of commercial banks and to engage in securities investment and insuranceinvestment business.