During the year, 5 companies have obtained the "license" for the establishment of the establishment, why did the banks set up a capital business franchise agency

Following the establishment of capital operation centers by small and medium-sized banks, national banks have also set off a wave of preparations. On December 1, a reporter from Beijing Business Daily combed and found that since the beginning of this year, agricultural banks, China Merchants Bank, Guangfa Bank, Hengfeng Bank, and Zheshang Bank have been approved to build a capital operation center in Shanghai. In the long run, before this year, a total of 20 were approved for the establishment of "permits", but most of the applicants were mainly urban businessmen, and only 2 national banks of Industrial Bank and Ping An Bank were approved. In the view of analysts, in recent years, the domestic regulatory authorities have strengthened the independent licensing of banking departments in different places to standardize the operation and supervision, banks set up franchise capital operation centers in order to actively expand business and profit space, and the addition of national banks will also help promote the development of small and medium-sized banking business and create more diversified market demand.

At present, the bank has been approved to establish a capital operation center

Some banks have obtained "permits" for the operation of off-site funds. On November 30, the China Banking and Insurance Regulatory Commission (CBIRC) issued an announcement agreeing to the preparation of the capital operation center of Zheshang Bank, requiring Zheshang Bank to complete the preparatory work within 6 months from the date of approval (September 29), and accept the supervision and guidance of the Shanghai Banking and Insurance Regulatory Bureau during the preparation period.

In addition to Zheshang Bank, a reporter from Beijing Business Daily combed and found on December 1 that since the beginning of this year, agricultural banks, China Merchants Bank, Guangfa Bank, and Hengfeng Bank have been approved to build a capital operation center in Shanghai.

It is understood that the capital operation center is mostly a capital business franchise institution formed by the financial market department or capital trading department of the bank, and the level is equivalent to a branch. For example, in March this year, the Agricultural Bank of China's Capital Operation Center was approved for construction, and the center is a branch-level franchise institution that was merged and transformed by the Merger of the Shanghai Management Department of the Agricultural Bank of China and the Shanghai Branch of the Financial Market Department.

In terms of naming, the names of the capital operation center are slightly different from each bank, and some banks are named "capital operation center", but the business scope of such institutions is generally similar, mainly covering local and foreign currency bond trading and sales, local and foreign currency interbank lending, interbank deposit, bill discounting and rediscounting, foreign exchange and derivatives trading and valet trading, precious metal agency trading and physical trading, leasing, etc.

Beijing Business Daily reporter noted that since the first bank capital business franchise institution Industrial Bank Capital Operation Center was approved for construction in 2014, 25 banks have obtained the "license" for capital operation and preparation. It is worth mentioning that before this year, there were fewer national bank capital business franchise institutions, and among the 20 funds franchise institutions approved for establishment by the 20 banks, most of them were city commercial banks, and there were only 2 national banks, Industrial Bank and Ping An Bank. At present, the 20 banks approved to establish capital operation centers have been opened, except for Guangdong Huaxing Bank, which was disqualified for failing to open as scheduled.

Talking about the reasons why banks have successively prepared to set up capital operation centers, Zhou Maohua, an analyst in the financial market department of Everbright Bank, said that in recent years, the domestic regulatory authorities have strengthened the supervision of independent licensing of bank franchise departments in different places, and banks have set up franchise capital operation centers in order to actively expand business and profit space, from traditional deposit and loan business to financial market business, cultivate new profit growth points, and improve the quality of asset and liability management. In addition, relevant franchise licenses are also relatively scarce.

Facilitate business development and diversification

In 2018, the former CBRC issued the Notice on Further Deepening the Rectification of Chaos in the Banking Market, which clarified that "the establishment of branches and outlets without approval, including off-site business departments, business departments, management departments, representative offices, offices, business centers, customer centers, business teams, etc., and engaged in business activities" is a violation of laws and regulations, which is included in the focus of the work of rectifying the chaos in the banking market that year.

Since the regulatory authorities issued a document to rectify the problem of the establishment of special operating departments in other places of banks in 2018, the operating institutions and departments of non-licensed banks in different places have been withdrawn. In the context of strong supervision, the compliance of independent licensing of bank franchise departments in different places is becoming more and more important, and some small and medium-sized banks are vying to apply for the establishment of capital operation centers in major cities, and 2018 has also become the year with the largest number of approved establishments or opening of bank capital business franchise institutions, with a total of 8 banks including Bank of Jiangsu, Bank of Ningbo and Bank of Hangzhou approved to be established or opened.

Judging from the location of the capital operation centers of various banks, 25 banks that have obtained the "license" for capital operation are more favorable to Shanghai. The carding found that in addition to the Bank of Beijing, Bank of Xiamen, Jiujiang Bank, Shengjing Bank, Bank of Ganzhou, Bank of Guilin, Chaoyang Bank, Shangrao Bank, Zhuhai China Resources Bank, Guangdong Nanyue Bank, Guangdong Huaxing Bank, Guangdong Shunde Rural Commercial Bank, 12 chose to build capital operation centers in the provincial capital city where the head office is located and the provincial capital city where the bank is located, the rest have chosen to set up in Shanghai.

Why is the location of the bank capital operation center generally preferred shanghai? Su Xiaorui, senior analyst of Analysys, believes that Shanghai, as an international financial center, not only has the advantages of agglomeration of capital, capital and other elements, but also has a large number of financial talents, which can provide a good soil environment for the development of bank capital operation centers.

Now there will be 5 national bank capital operation centers in Shanghai, what does it mean for small and medium-sized banks to set up capital operation centers in the local area? Zhou Maohua said that the establishment of capital operation centers in different places is conducive to expanding the business scope and improving operational efficiency for small and medium-sized banks; but it also increases the difficulty of supervision, and the effective communication and coordination between the off-site franchise centers of small and medium-sized banks and the head office department and other departments also faces certain difficulties. Although there is competition in the entry of national banks, it is also conducive to the development of small and medium-sized banking business, and some homogeneous business competition is inevitable, but more market participants have also created more diversified market demand, enhanced the depth and breadth of the market and transaction activity, and contributed to the development of related businesses of small and medium-sized banks.

"In terms of the opportunity for small and medium-sized banks to set up capital operation centers in different places, they can use the opportunity of setting up capital operation centers in different places to carry out more diversified business and attract a wider range of customers; on the one hand, they will face competition from large banks, and on the other hand, they also need to clarify their own differentiated routes and carry out capital operation business in a targeted manner." Su Xiaorui said.

Beijing Business Daily reporter Meng Fanxia and Li Haiyan