Recently, the Shanghai Banking and Insurance Regulatory Bureau issued a reply saying that it agreed to open the China Merchants Bank Co.Ltd(600036) capital operation center.
In addition to the specialized institutions of capital business, the reporter found that at present, there are more and more “licensed” independent businesses of commercial banks, mainly focusing on the fields of capital business and credit card business. In recent years, the specialized institutions of private business, bill business and small and micro financial business have gradually become the focus of the layout of commercial banks.
“The establishment of franchised institutions is conducive to the independent matching of authorization, management resources, decision-making channels and decision-making mechanisms, stimulate the enthusiasm of the exhibition industry through the establishment of franchised institutions, improve business professionalism, innovation ability and market response ability, and build a profit center and business sub brand”. On January 6, Yang Haiping, researcher of the Institute of securities and futures of the Central University of Finance and economics and general manager of the strategic research department of the Bank of Inner Mongolia, said in an interview with the reporter of Huaxia times.
franchised machines constitute a popular bank layout
According to the reply of Shanghai Banking and Insurance Regulatory Bureau, the business scope of China Merchants Bank Co.Ltd(600036) capital operation center is: money market business, bond business, foreign exchange business, precious metal business and financial derivatives business, and other capital operation businesses approved by CBRC and authorized by China Merchants Bank Co.Ltd(600036) head office.
The China Merchants Bank Co.Ltd(600036) capital operation center was approved in May 2021. Unlike in the past, small and medium-sized banks have mainly applied for the establishment of franchise institutions. Since 2021, most of the approved capital operation centers have been joint-stock banks and large banks, such as China Zheshang Bank Co.Ltd(601916) , Hengfeng bank, Agricultural Bank Of China Limited(601288) .
According to the guidelines on the supervision of franchised institutions of Chinese funded commercial banks, franchised institutions refer to the institutions set up by Chinese funded commercial banks for business in a specific field, which are different from the traditional branches, and have the following characteristics: for a business unit or service object; Carry out business activities solely to the public or trading pairs; Authorized by the general manager, it is independent of the operation department or local branch in resource management, business assessment, operation resource allocation, risk management and internal control.
When carrying out business activities, a franchise institution and its branches shall apply for a financing license and register with the commercial, tax and other departments according to law.
In terms of credit card business, the notice of Beijing Banking Regulatory Bureau on Further Strengthening the management of credit card business in 2016 proposed that each card center should continuously improve the development mode of franchised institutions and establish a management mode of franchised institutions that meets the requirements of the guidelines on the supervision of franchised institutions of Chinese funded commercial banks and is suitable for the actual situation of the bank and the development trend of credit cards.
In terms of capital business, in 2018, the regulatory authorities issued the notice on further deepening the rectification of banking market chaos, The acts of “establishing branches and outlets without approval, including non local business departments, business departments, management departments, representative offices, offices, business centers, customer centers, business teams, etc., and engaging in business activities” are classified as illegal business activities and listed as the key points of rectifying the chaos in the banking market in 2018. This means that banks must be licensed to expand their business in other places.
With “big retail” and “big wealth” becoming the key words for the transformation and development of commercial banks, under the dual thrust of regulatory norms and business transformation, the “licensed” franchise operation mode is more and more favored by commercial banks.
Yang Haiping, a researcher at the Institute of securities and futures of the Central University of Finance and economics and general manager of the strategic research department of the Bank of Inner Mongolia, told the Huaxia times that the establishment of franchise institutions is conducive to the independent matching of authorization, management resources, decision-making channels and decision-making mechanisms, so as to stimulate the enthusiasm of exhibition and improve the professionalism of business through the establishment of franchise institutions Innovation ability and market response ability to build a profit center and business sub brand.
An Guangyong, an expert of the credit management committee of the all union M & A Association, also said that compared with non franchised institutions, franchised institutions will be more flexible in their operation mechanism. Generally speaking, as a non independent department, non franchisees should follow the company’s rules and regulations. Such an architecture is very convenient in its management, because it is a unified management system, which is very efficient not only in terms of time cost, but also in terms of capital cost.
However, he also pointed out that only in a mature and stable industry can the “high efficiency” of commercial bank franchise be established.
based on the business development stage
At present, most of the franchised institutions established by commercial banks are capital business and credit card business. In recent years, the franchised institutions of private banking business, bill business and small and micro finance business have gradually become the focus of layout.
According to the reporter’s incomplete statistics, up to now, a total of 25 capital business franchises of banks in China have been approved to operate independently, and 5 private banking franchises have been approved to be established.
Yang Haiping said that although the capital business and credit card business are closely related to other businesses of the bank, they are also relatively independent, have a high degree of marketization, and have higher requirements for decision-making and approval efficiency. They are the first choice to build an independent profit center and business sub brand.
“There are some special backgrounds for the establishment of capital operation centers. In view of the chaos existing in the development of non licensed institutions in different places of small and medium-sized banks in the early stage, the regulatory authorities intend to standardize the process of cleaning up, rectifying and issuing licenses.” Yang Haiping added.
An Guangyong frankly told reporters that businesses in the fields of capital business and credit card are facing many changes, especially with the development of Internet and other technologies, the requirements of bank customers, especially VIP customers in the fields of capital business and bank card, are more differentiated and diversified. Under such conditions, more flexible operation modes are needed to operate. The traditional model obviously can not meet these dynamic needs. By setting up specialized institutions, banks can respond more flexibly to market changes and seize the initiative.
Wang Chikun, an independent economist and financial commentator, pointed out that banks need to pay attention to the life cycle of the business.
“Different life cycle stages have different requirements for business governance. If the business is in the business formation stage, the market demand is insufficient, the industry consumption is not strong, the market scale is not large enough, and the business income and profit are not enough to cover the relevant costs, the business does not have the ability of independence or franchise.” Wang Chikun further said.
Yang Haiping also stressed that banks should focus on three factors when setting up professional institutions: first, the bank’s business foundation, that is, according to the bank’s business development plan, whether the bank’s credit card, capital business, bill business and small and micro finance business need to be further improved through franchised institutions. The second is the management regulations of the regulatory authorities, that is, the administrative license conditions of the regulatory authorities. Third, the bank’s management ability and personnel quality. The establishment of specialized agencies has shortened the decision-making chain and improved the market response ability to a certain extent, but it also brings higher requirements for compliance management and risk management. If the internal control can not keep up, it may also cause new problems.
(source: Huaxia times)
