| Bank loan is the crown jewel as well as a major source of profit in a commercial bank. However, unprecedented changes have taken place in the banking climate in that disintermediation and the reform toward a market-oriented interest rate have taken speed, that exterior supervision has triggered an intensified capital constraint mechanism, that competition among banks has reached a historic level, and that financial innovations in terms of business models and financial products have occurred in a much faster pace. Therefore, loan business is now faced with plenty of challenges such as its profit margin, potential market, as well as its status as the crown jewel of a commercial bank. It’s time for Chinese commercial banks to do in-depth research on how to be a market leader with sustainable competitive advantages shaped by making appropriate marketing strategy for bank loans, and timely grasping potential opportunities in the changing financial climate. This rings so true to subsidiaries of Agricultural Bank of China (hereinafter ABC subsidiaries).Inspired by the theories and research methods in such disciplines as economics, finance and, science of management, I have made an in-depth analysis in this paper on how to make ABC a market leader with sufficient capability in sustainable development in the loan sector. The following four aspects are covered in this paper:1. Based on the existing literature in the marketing strategy for bank loans, I set up, in this paper, the framework for financial climate analysis, put forward the method, flowchart on how to choose and implement the right strategy.2. Via a thorough analysis to the bank loan market in Jiangsu province, I divided all the market players in Jiangsu province into4major strategic communities, and identified the rivals that are in the same community with ABC. Then, a specific analysis is shown regarding the advantages and disadvantages ABC has been faced with.3. A case study of ABC Jiangsu branch in bank loan development. Strategies and marketing policies were outlined based on competitiveness analysis and market positioning. In terms of strategies, an "aggressive and steady" model for bank loan development is suggested. Firstly, while maintaining the advantages in conventional market (agro-related market, i.e. Agriculture, rural area, farmers), ABC should adapt to the trendy market brought about by the massive urbanization in China. Secondly, in order to get a larger share of the pie, ABC should be more aggressive in urban areas, large-and-medium-sized cities in particular. Thirdly, as Chinese people are now spending more, ABC should be more aggressive in personal banking sector. In terms of marketing policies in bank loan, four tips were given. Firstly, optimizing the makeup of loan products; Secondly, boosting the development of marketing channels; particularly, more play should be given to banking outlets in corporate banking business; thirdly, optimizing our pricing strategy so as to keep pace with the deepening reform towards a market-oriented interest rate; fourthly, taking full advantage of innovative risk-control instruments (such as loan quota, securities or collaterals, loan tenor control, and product innovation, etc.) to cut loan risks. 4. Besides, I analyzed the problems that may appear in implementing the aforementioned strategies, and solutions were given in this regard. |
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