Study On Development Strategy Of CEB Shanghai Branch’s Interbank Business

With the gradual depth of interest rate marketization, speed-up innovation of financial products, and speed-up depth of financial disintermediation, the inter-bank business of China’s commercial banks has been developed rapidly since Year 2008. Specially, it grew up dramatically during the period between Year 2010 to Year 2013. Nowadays, the inter-bank business has already developed into one of the three principal businesses, i.e., keeping pace with company business and individual business, which are as the other two principle businesses. Compared with traditional deposits and loans, the inter-bank business has some unique characteristics, including small regulatory constraints and lower risk taking, and is a high-quality business under the system of separate operation and separate regulation. The development of the inter-bank business supports for the rapid expansion of bank asset size and becomes a new profit growth point of bank business. However, with the gradual expansion of regulatory strength, specially, with the issue of No. 127 and No. 140 documents in Year 2014, the inter-bank business suffered a huge impact on its operation mode and development direction. Under this circumstance, the inter-bank business in CEB Shanghai Branch has inevitably been encountered with severe challenges. Thus, it becomes imperative to find out a suitable path for its own development.This paper mainly focused on the inter-bank business of CEB Shanghai Branch. By carrying out theoretical studies and SWOT analysis, i.e., relevant theories and methods of management and economics, this paper illustrated current status and necessity of CEB Shanghai Branch systematically, as well as existing problems and causes. Based on this study, it appears that the inter-bank business in CEB Shanghai Branch has the following problems:(1) product homogeneity and the lagging of new product promotion;(2) obvious term mismatch for capital, and high pressure of liquidity risk;(3) decreased rate of return on assets and increased difficulty of profitability; and(4) imperfect internal mechanism resulting in concentrated marketing pressure and the loss of resource.Based on the comprehensive analysis of the development characteristics of inter-bank business in CEB Shanghai Branch, this paper viewed this business from four new dimensions, i.e., strength, weakness, opportunity and threat, and also proposed six recommendations on sustainable development of the inter-bank business in CEB Shanghai Branch by combining the analysis of institutions in the same industry. The recommendations are: to promote capital securities business, to set up Shanghai specialized institutions to carry out new business pilot, to establish acceptable mechanism of the inter-bank business in the branch, to reinforce customer maintenance and expand cooperation of banks and futures industry, to use business features to exploit profit growth point, and to arrange structure of assets and liabilities and prevent from liquidity risks reasonably. At the same time, for the above-mentioned strategy this paper propose effective measures to safeguard its smooth implementation, and provides operational solution for the sustainable development of CEB Shanghai Branch’s inter-bank business.