Research On The Profit Model Of GM Village And Township Bank

In December 2006,China Banking Regulatory Commission issued "Severler opinions on the adjustment to ease market access of rural financial institutiongs with banking policies better support socialism new rural construction",put forward to set up village and township banks.The police broke the silence of Chinese rural financial market,village and township banks have sprung up rapidly in China.At the end of December 2017,there are 1565 village and township banks set up in China.Village and township have covered more than 68%of the nation's rural coutries and cities.The establishment of village and township banks has increased the financial supply in rural areas to a certain extent.The village and township banks have gradually taken on the mission of serving the Three Rural Issues-the agriculture,rural areas,and farmers,boosting the rural economy in China.However,the business environment is changing both externally and internally.The outside environment is witnessing the step-by-step improvement of the financial supervision,the full liberalization of the market-oriented interest rate,the corroding occupancy in the rural financial market by the Internet finance,and the coming expiration of various fiscal and tax incentives.In the meantime,the internal environment is changing accordingly.The social recognition of village and township banks is yet to improve,the operation and management capabilities of different village and township banks vary,and the growth of the loan slows down gradually.The impact of these combined factors has limited the current profitability,the future operation and management,and the long-term business development of the village and township banks.It is,therefore,necessary to carry out an in-depth research and analysis of the profit model of the village and township banks,summarize the operation and management concepts of well-run village and township banks,and then construct the profit model that suits the village and township banks.The GM village and township bank situated in H County in West China began its preparation since 2009 and opened officially on April 26,2011.As of the end of December 2017,the GM village and township bank had established 6 branches in H county,with 3 in suburban areas while the other 3 in town.The deposit balance was 400.8957 million yuan,an increase of 52.4%compared with the same period last year.The loan balance increased by 36.39%to 349.7077 million yuan.Over the past six years,the GM village and township bank has progressed to be a bank with rapid development,high potential for growth,and certain influence in the rural area.However,the urban commercial banks never stopped snatching the financial market in rural areas.By the end of 2017,one urban bank entered the H County despite the 8 banking institutions already existed there,which intensified the horizontal competition among banks in H County,imposing more pressure to the GM village and township bank that kept seeking survival in a tight corner.What the GM village and township bank has experienced bears great resemblance to that of the majority of village and township banks established in West China.Therefore,to study the existing problems in GM's profit model and to propose suggestions to the construction and transformation of GM are of significance within a broader range,since they can promote the healthier development of similar village and township banks in West China.