Research On Loan Pricing Of Bank Of Communications Shanghai Branch

For a long time,loan pricing has been one of the main challenges faced by China's commercial banks.As the reform of China's state-owned commercial banks deepens,the process of marketization of interest rates speeds up, the competition among banks has turned more and more fierce.Loan pricing method and strategy has become a magic weapon in the competition and without doubt, loan pricing capability has become the core competence of a commercial bank.The research of this article started from loan pricing theory by introducing the basic theory and principles of loan pricing, factors influencing loan pricing.Then,the study focuses on 3 most commonly adopted loan pricing models,i.e.cost plus pricing model,price leadership pricing model and customer profitability analysis pricing model.The author analyzed and compared these three models.The author then analyzed current management status of loan pricing of Bank of Communications Shanghai Branch,pointed out problems in current loan pricing process through data comparison.Finally,after absorbing best practices of Bank of Communications Hong Kong Branch,the author proposed three improvement plans:pricing based on risk-adjusted return on capital,pricing based on internal funds transfer and pricing based on customer profitability analysis.The author further proposed a new loan pricing model for Bank of Communications Shanghai Branch.