Shengjing Bank Cross Area Business Strategy Case Studies

Urban commercial banks are an important and special branch of Chinese banking industry. Its predecessor was established in1980’s as urban credit cooperatives. By the end of June2012, there are137urban commercial banks in China, the business institutions are spread across all provinces, autonomous regions, municipalities directly under the Central Government and Prefectural-Level city in China. City commercial bank has developed and become mature gradually. Though its development is uneven, a number of city commercial bank have completed the shareholding system reform, and reduced non-performing assets in different ways, changing management mode. They have not only taken a big possession in local market, but also developed rapidly and evolved into the rank of the world’s Top500outstanding banks.Single development mode of city restricts operating statement of urban commercial banks’ development,resulting in urban commercial banks’hard-breakthrough limits to asset scale, customer resources, cost control on the aspects to and regional risks which are high and impossible to resolve. China Banking Regulatory Commission issued the city commercial bank regulation and development outline in2004, clearly encouraged urban commercial banks to conduct joint, restructuring, merger and acquisition and trans-regional development. Under this background, Shenyang Commercial Bank actively formulated cross-area business development strategy. In2007, Shenyang Commercial Bank officially changed its name to Shengjing Bank, and successfully set up the first foreign city branch in Tianjin. Up to now, it has already established10foreign city branches, including Tianjin branch, Beijing branch, Shanghai branch, Changchun branch, and so on. At the same time, it has bought shares of six rural banks, which are Shenyang Shenbei, Shenyang Faku, Shenyang Liaozhong, and so on.As the cross-area business development strategy won a huge success, at the same time Shengjing Bank also exposed the lack of capital, management mechanism backwardness, the core competitive power loss, lack of talents,information technology behind, and financial products shortage problem, which has caused the restriction to cross-area business development. Considering the above reasons, based on the current situation of the development of Shengj ing Bank cross area as a case, this paper analyses a certain extent demonstrate to Shengj ing Bank across the region of the problems existing in the operation and development, and puts forward some constructive Suggestions, in order to provide reference for future work practice and reference.