Rural Commercial Bank Competitiveness Analysis

In recent years,the state has expanded support for agriculture, rural areas and farmers, that improved the appearance of rural areas. Suffering there major shuffle of rural financial system, the rural credit cooperatives improved greatly after being restructured into rural commercial banks, and the capacity of management decision-making also improved. Being "fourth tier" of Chinese financial sector rural commercial banks began to spring up in rural areas. However, due to various factors in history and reality, the financial system in rural areas is still not perfect, financing difficulties, high risks and other issues is still the bottleneck for financial development in rural areas. As new rural financial institutions rural commercial banks cannot be compared to other big banks from the size or profitability. Facing the fact that more and more large and medium-sized banks began to gradually expand the rural financial market, how to cope with the fierce competition in the market based on its own characteristics is still an urgent problem of rural commercial banks.For the above situation, this article is committed to find the key factor for rural commercial bank to enhance the competitiveness. The paper consists of five parts: the first part introduce the background and the significance of topic selection. The second part is the theoretical basis. Summarizing the research principles and methods of general competitiveness, at the same time come up with the particularity of the competitiveness of rural commercial banks, this part also deeply explored Jacob Yaron’s Business Performance Assessment Criteria. The third parts present the general development of Chinese rural commercial banks and confirm the index system and empirical analysis method for evaluating the competitiveness of rural commercial banks. The forth parts systematically analyzed the competitiveness of 18 typical rural commercial banks by factor analysis and cluster analysis, then find the major factors that affect the competitiveness. The fifth parts provide some suggestion for improving the competitiveness of rural commercial banks based on the empirical results.Empirical Analysis Conclusion: competitiveness of rural commercial banks are limited by four main factors as the size and innovation, profitability and ownership structure of governance, mobility and security, as well as market penetration, which is mainly affected by scale and innovation. In this paper, author draw a conclusion that China’s rural commercial bank can expand scale and realize scale economy through strength financial innovation, and complete company governance and control credit risk through stabilizing system advantages. Meanwhile, rural commercial bank can enhance market penetration through transregional operation. All of these methods lead to a result that is enhancing comprehensive competiveness. Author hopes to this paper’s research can provide reference for rural commercial bank’s sustainable and stable development.