Study On Cost Management Of Shenzhen Development Bank

With the entry to the World Trade Organization, China has to open her domestic financial market to foreign investors, the competition between Chinese banks and foreign banks will be more and more intensified. The key factor to win in this competition depends not only on financial strength, but further more on developing a comprehensive and advanced managing system. The financial crises burst out repeatedly worldwide in last two decades, have proved that an efficient risk preventing and alarming system is very important for Chinese banks to survive in this competition.The author of this thesis has done a thorough research into Shenzhen Development Bank (SDB), on the basis of a vast amount of first-hand information and data. The research is done on the basis of All-Around Cost Management Theory and conducted systematically over SDB cost management through longitudinal and transverse comparison, combining with qualitative and quantitative analysis. By referring to the experience of commercial banks in the western countries as reference, the author using the cost management method - All-Around Cost Management, which is suitable for the actual situation of SDB. Comparing to the traditional cost management methods, All-Around Cost Management is a modern one aimed at adjusting and controlling cost during a moving process, as a result, it shifts the monitoring operations from the afterwards stage into the forwards stage, and also from a passive post-event situation into an initiative pre-event situation. The core contents of All-Around Cost Management include four aspects: full process control, whole staff cost, standard cost and cost responsibility center. Among these four aspects, the full process control is the most important aspect that could distinguish the All-Around Cost Management from the traditional cost management. Therefore, the main subject of this research is to discuss the application of All-Around Cost Management through the full process control, which consists of three parts: feed-forward control, which seeks to anticipate the cost movement; process control which sets down cost standards and cost planning in order to limit the cost payout; and feed-back control, which analyses the variances between the effective cost and the planned cost, investigates the variances in order to find the way to cut cost.The target of All-Around Cost Management is to realize a more reasonable cost structure and more efficient production in SDB, and finally promote the risk-control abilities and sustainable development capacity of the bank, in order to maximize the enterprise value and the interest of its shareholders.This research is of much practical importance for the long-term development of SDB. Meanwhile, it can serve as reference for other joint-stock commercial banks and state-owned commercial banks.