A Study On The Development Strategy Of Commercial Bank 's Investment Banking Business Differentiation

Accompany with the development and complement of the capital market in ourcountry,more and more companies choose to finance themselves by directfinancing,such as going-public,bond-issuing, the mothed of direct financing isreplacing the traditional indirect financing.At the same time,the trend of interest ratemarketization and finance disintermediation were reinforced, the investment demandfor the companies and resident are diversified, the change of multiplex environmentaland internal demand made the commercial banks adjust their business ideas, take fulladvantage of the existing costumers, funds and reputations, rapidly develop theintermediary business to replace the method that the profits are made by the netinterest income. Although our country implements the financial system of dividedoperation and supervision segregation, the mixed operation of the commercial bankswas restricted, however, the supervision policy for the divided operation becameflexible, commercial banks can also operation a little part of the securities andinsurance business. As the representative of the intermediary business of commercialbanks, the investment banking business was born and became more and moreimportant. Conclusively, the commercial banks had be equipped with the externalenvironment and internal power for the development of investment banking business.In the year of2002, the Industrial and Commercial bank of China(ICBC) hadestablished the investment banking department first, and became the first investmentbanking institution in commercial bank. Hereafter, the big four stated-ownedcommercial banks such as the Construction Bank of China, the Bank of China etc.andthe shareholding banks such as China Merchants Bank, Everbright Bank all followedthe lead of of ICBC style one after another. By establishing the variousinstitutions,they made full use of their resources to support their investment bankingbusiness. After the development of more than ten years, investment banking businessbecame one of the most important intermediate business, it can satisfy the diversifieddemand of the investment and financing for the customers, and point out the way ofcommercial bank transformation. As the five branches directly under the ICBC general headquarters, Qingdaobranch established the investment banking business in2009. The investment bankingbusiness developed rapidly and had been quite competitive. However, many problemsrestricted the sustainable development of the investment banking business of Qingdaobranch, such as the homogeneity of the investment banking products and services, thelagging of human resources development, lack of the technology content of theproduction and the imperfect marketing mechanism. In the near future, the investmentbanking business among all the banks in Qingdao will be torn apart by rivalprincipalities. Qingdao branch needs to establish an effective development strategyfor the investment banking development, for the purpose of keeping the leadingposition and consolidating and enlarging the competitive advantage.With this background, this thesis analyzed the macro and industrial environmentby PEST model and Michael Porter’s Five Forces Model, made the conclusion that itis the crucial time for Qingdao branch to develop investment banking business. Baseon the comprehensive demonstration and evaluation for the development principles ofinvestment banking business and the necessity of heterogeneous strategy, this thesisalso analyzed the internal and external environment, located its position, structuredthe core of the heterogeneous strategy system. In this system, Qingdao branch willimplement the heterogeneous strategy in the investment banking operating mode,business and product, development path, team building etc., in order to increase themarket competition. Finally, this thesis also discussed the safeguard mechanism suchas the marketing mechanism, excitation mechanism, internal risk control system,R&D, business linkage etc.The research of this thesis is not only make for the ICBC Qingdao branch toincrease its make competitions, but also supplies an investment banking example forother commercial banks. It also provides the theoretical foundation and referencewhich are helpful for promoting the mixed operation development for the commercialbanks in China.