Efficiency Study Of City Commercial Bank With Cross-regional Business

Cross-regional business of city commercial bank emerges in 2006, the leaders are several powerful banks like Bank of Beijing, Bank of Shanghai and Bank of Tianjin. In 2009, the CBRC further released the restriction which hindering cross-regional branches set up by city commercial bank, it lead to a booming cross-regional business wave, with most of the city commercial bank achieved cross-regional business by different extent. However, the cross regional business expanded so fast the CBRC had to suppress it from 2011, by restricting approval process for new cross regional branches set up and requiring commercial bank for higher business indicators. Although cross-regional business slowed down in the latest 3 years, but it is still an important strategic planning of city commercial bank, the trend never charged.Is cross-regional business necessary for any city commercial bank? It’s a question worth to be carefully studied. 32 city commercial banks with cross-regional business are selected as research objects, focusing on their cross-regional business efficiency from 2009to2013. The research objects cover almost all provinces and central governing municipalities except Xinjiang and Tibet province, which is very representative in sample size and scale. The main content is as follows:(1) Introducing the forming and financial status of city commercial bank, as well as its cross-regional development history, business mode. Besides, the feature of cross-regional business are summaried.(2)Bank efficiency, as study object of this paper, is carefully determined. We focus bank efficiency in micro scale level which is the input/output ratio of individual bank. The study method “DEA” is introduced in detail.(3) Scale efficiency, pure technology efficiency and technology efficiency of the 32 sample banks is measured based on DEA model, which shows the technical efficiency of sample banks is improving.Influence factors for cross-regional business efficiency are analyzed via 5 aspects: business scale, management ability, degree of cross-region, capability and anti-risk.(4) According to the measurement result, and considering the current status of cross-regional business for city commercial bank in our country, we present some suggestions to improve efficiency of cross-regional business.