Major Banks Go Through Sub-Branch Strategic Adjustment, Restructuring, Cuts
Xu Wei
DATE:  Jul 10 2017
/ SOURCE:  Yicai
Major Banks Go Through Sub-Branch Strategic Adjustment, Restructuring, Cuts Major Banks Go Through Sub-Branch Strategic Adjustment, Restructuring, Cuts

(Yicai Global) July 10 -- Banks are restructuring their community sub-branch strategy after establishing what seems to be an excessive number of sub-branches, reported Beijing Business Today. Some 38 community sub-branches in Beijing stopped operations in the first half of this year, while banks continued opening community sub-branches in some smaller cities. Banks are adjusting their community sub-branch strategy in response to the regulatory environment and previous aggressive expansion, analysts point out.

Some 38 community sub-branches in Beijing including China Bohai Bank Co., Shanghai Pudong Development Bank Co. [SHA:600000] and China Everbright Bank Co. [SHA:601818] halted operations in the first half of the year, report said, citing preliminary statistics. However, 11 new community sub-branches opened, including seven set up by Bank of Beijing Co. [SHA:601169], three by Ping An Bank Co. [SHE:000001] and one by China CITIC Bank Corporation Ltd. [SHA:601998], according to a statement by China Banking Regulatory Commission Beijing bureau.

Regulators have allowed small and medium banks with relatively fewer business outlets to set up community sub-branches to compensate for their lack of physical channels and have eased standards on establishing banking outlets and relevant procedures by allowing them to set up community sub-branches as well as small and micro sub-branches, said Dong Ximiao, a researcher at the Chongyang Institute for Financial Studies at Renmin University. However, some lenders have used this as a tool to excessively expand physical channels, which is not what the regulators intended.

Therefore, relevant banks are making necessary adjustments and restructuring as community sub-branches are required to have a financial license. Community sub-branches need to focus on synergies with business strategies, providing retail banking services and forming coordinated channels by combining with existing outlets and channels, said Dong, adding they should also exploit synergies between online and offline resources to improve services.

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Keywords:   MSCI,Strategic Adjustment,Restructuring,SPDB,CEB,PAB,CITIC,Regulator,CBRC,Sub-Branch,Banking,Finance