Research On Synergy Effect Of Financial Holding Company

Since the1970’s, the financial services industry of west countries who developed marketeconomy has started the transition from the divided operation system to the consolidatedoperation system. The mixed operation has become the main stream of global financialdevelopment. Nowadays, although our country has not enacted a law about financial holdinggroup, large enterprise groups that have the model-design of financial holding company havebecoming founded, such as CITIC Group, Everbright Group and Ping An Group. Setting upfinancial holding group is the preferred mode for our Chinese finance and obtaining synergiesis the key reason for the existence of financial holding company. This paper selects synergyeffect of financial holding company as the research subject. Basing on summing uptheories about financial holding company and synergy effect, this paper discusses the necessity,the influencing factors and the ways of realization about synergy effect of financial holdingcompany. By using case study method, it analyzes what means CITIC Group used to obtainsynergies on management level, operating level and financial level. And it sums up therelevant suggestions about China’s development of financial holding group.This paper obtains the following conclusions and enlightenment:(1) The resources sharing of customers, information, funds, personnel, technology, saleschannels in the internal financial holding group makes the group internal resources allocationexisting collaborative space. The complementarity between different financial business infinancial holding group, the pursuit of decreasing the cost of financial transactions andimproving the economic efficiency, and the development of network information technologyprovides the power and possibility for financial holding group to obtain synergy effect.(2) Obtain synergies of financial holding group is mainly affected by three factors: theways of group resource integration, the ways of organization and management mode and thecross-selling among different financial institutions.(3) The ways of realization about synergy effect of financial holding company are mainlyfrom three aspects of synergies: setting up the organizational structure of financial holdinggroup and coordinating the strategy formulation can obtain the management level of synergy;integrating customer resources and sales channel resources, jointly developing financialproducts, setting up the group information technology platform and maintaining the brandeffect can obtain the operating level of synergy; the financial aspect of synergies is mainlyreflected in the formation of internal capital markets.(4) Building financial holding group in China should focus on building a resource sharingplatform and an organizational structure of business division, carrying out the cross-selling in adeep-going way among different financial institutions, and devoting to the group brandconstruction and maintenance.