| International Factoring is a banking comprehensive financial service which includes trade financing, commercial credit information, receivables management and credit risk guarantees. Because it can be a good solution to the overusing-funding pressure of exporters and credit risk of importers, International Factoring has been widely used in the international market in recent years. In China, International factoring business also reflects the rapid development trend, which has increased by an annual average of 172% from 2002 to 2006. However, at present, the development situation of international factoring business in CCB Jilin Branch is not optimistic, and since the running international factoring business in 2003, international factoring business promotion and development are extremely slow.The developing scale and speed of International Factoring are depended on status of the international business particularly on the status of international settlement business. From the present stage of international settlement business in CCB Jilin Branch, there are three main issues as following, Firstly, the customers structure of international settlement business is irrational, customer industrial distribution and regional distribution concentrate, the number of small and medium-scale enterprises are fewer, and the trends of homogenization of international business is evident. Secondly, all types of international settlement products develop imbalance, operational update is slow, service means is relatively single, and there are big gap between CCB Jilin Branch and the large international commercial banks in business structures. Thirdly, the international settlement business profit margins in decline, profit contribution gradually weakened, which directly affect CCB Jilin Branch international settlement business profitability. The reasons, mainly due to a number of external and internal constraints affected, are as follows.We analyze the problems from the external view. Firstly, Jilin Province, as China's old industrial bases and a major agricultural province, the overall situation of economic development is in the middle and lower reaches of the whole country in recent years. Although the speed of development is faster, the total size is insufficient. The recent status of small size and non-optimized structure still need a longer period of time to adjust and develop, which directly limit the expandation and innovation of commercial banks' international business in Jilin Province. Secondly, the relatively single demand of international business customers and the own defects of target customers of small and medium-scale enterprises restrict the realization of International Factoring's financing functions and impact the development of business. Thirdly, the homogenization of competition on international business in banking industry in Jilin Province will make banks more resources into the existing customers and business competition, so the promotion of the development of new products is insufficient.We analyze the problems from the internal view of CCB Jilin Branch. First, because of the deviation of operating and positioning, meanwhile of lacking awareness of the business operation flow, International Factoring has not yet been used as a core competitive measure to improve international settlement business, which restricts enthusiasm and initiative of improving international factoring business. Second, systematic marketing strategy and marketing mechanism on international factoring business is scanty, location of the international business objectives customers is single, and different departments coordinated function amplifies not enough. Third, for the reason of inadequacy of risk management and control, some of some customers with relatively low profitability or high risk are excluded from the international factoring services scope. Fourth, lack of professionals also constraints CCB Jilin Branch to expand international factoring business smoothly.With the changes of external economics and financial environments, to expand International Factoring has become CCB Jilin Branch's necessary choice to realize its own development. First, the international factoring business' own advantages determine that it is more suitable for small and medium-scale growing import and export enterprises. In recent years, foreign trade volumes of such enterprises in Jilin province expand further rapidly, which increases the international financing needs, and the development of international factoring business will be more supportive of small and medium-scale enterprises from import and export financing difficulties. So international factoring business has its own necessary target market. Second, to explore the international factoring business is CCB Jilin Branch's necessary channel to suit for the trends in the international business competition, to enhance the operation and management level, and to expand the necessary space to profits.To sum up, CCB Jilin Branch should actively learn from the international banking industry with the advanced experience from the three-pronged approach to explore the international factoring business. First, to imply effective business marketing strategy. CCB Jilin Branch should aim its international factoring business' main target customers at the small and medium-scale growing import and export enterprises, subdivide target market, and use the existing other industries' customers to expand international factoring business in the consolidation of main international business customers' market shares in key industries. CCB Jilin Branch should also strengthen coordination between its various departments, provincial and branches, and give full play to the customer manager and product manager for customer marketing, at the same time expand the international factoring business' promoting ways, improve the promotion propaganda means, and strengthen the abilities for business customers to know and apply it. Second, to raise the international factoring business' risk control level. Through cash flow, overdue default rate and non-financial indicators to evaluate customers risk accurately. By choosing the appropriate type of factoring, enacting strict terms of contracts, clearly defining customer' obligations, effectively guarding against the risk of fraud, etc, to control the operational risks in international factoring business. Third, to strengthen the management on international factoring practitioners. According to the characteristics of the labor-intensive business, through establishing science incentive and restrictive mechanisms, to stable existing business talents, and gradually to expand the scale of professionals. Through diverse training and exchange activities, to improve the professional quality of employees and capabilities of controlling operational risks. Thus to achieve the overall improvement of the abilities on operation and management of international factoring business in CCB Jilin Branch. |
