China Bank Internationalisation Project Essay

This approach to a project is very interchange adequate to(p) to what happens regularly in the financial run industry. A project has to be completed, a team is set up (usually with individuals of contrastive skills with different backgrounds and from different countries) who then k directly to work together to complete the task. Managers then approximate to individually one team member in such a do work on the basis of the quality of the final joint work produced. basis mainland chinawares confides are arduous to globalise and your task is to armed service advise a Chinese bank on how to do this. savings bank of china, for example, has on its website its strategical Goal and other(a) banks commit similar goals Strategic Goal Aiming at excellence, sustaining growth and building a first-class international bank. Strategic Positioning A large transnational banking group charge on commercialized banking stemma and providing alter go integrated some(prenominal) at home and abroad. Commercial banking focused diversification With commercial banking business as the core and foundation of the groups build upment, Bank of China will keep improving its brand popularity and core agonisticalness by expanding business network and customer base and nhancing product innovation. By victorious advantage of the comparative hawkishness of diversified services for matching customers via unified channels under unified strategy and brand, it will strive to develop various business lines such as investment banking, fund, insurance, investment and leasing so as to create a synergistic effect on the diversified platform in the interest of comprehensive and excellent financial services for customers. To provide a structure to this advice, you are required to write answers to separately of the five topics below (though you need not follow exactly the items in each).Each of the five slits should be not more than 500 haggling i. e. 2,500 words maximum for th e whole project. This will also make it untold easier to largess each project in class i. e. to read disclose the paper in class. Also, it will help you understand the need to be concise. Most business papers sop up an Executive Summary at the front of a paper and in the case of this project, the executive stocky is the actual paper. You will, of course, be likely to write more on your section in the first instance but you will then brook to reduce it in size to make this summary the correct length.Although you whitethorn choose to allocate one section to each individual in the group, it is VITAL that the quality of English (grammar, spelling), is high throughout. Thus one person who is good at English should check through the whole paper. Also, each section should use the same font and typesize. You should also ensure that each of you understands each of the 5 topics and is able to speak in class just about any of them. I may choose any one of you to drive home and to expl ain your proposals. Project Chinas banks are trying to internationalise. You hold up been employed as consultants to a well-known large Chinese bank.They have asked you to write a musical composition for them as below Until now, we have been in general a domestic financial institution operating in mainland China. We stop that the profitability of our existing domestic business may decline and that our brace sheet size will not increase as sporting as before. We are therefore treating trying to internationalise. We need to learn from western sandwich experience of internationalisation and try to apply that experience (though modified for specific Chinese characteristics) to our own internationalisation project.Please prepare a inform that will help us achieve our objectives. Having chosen your bank (one of the overlarge four) set out a strategy that it might follow. You should start by looking at the banks latest annual report and accounts and any press references to inte rnationalization of Chinese banks. Some topics that you might get well are suggested below but the actual topics that you think are applicable may be wider than this. You should also look at the experience of horse opera banks which have tried to become full-service i. e. international financial super commercializes. I.Examine match sheet strength, current and future expected loan losses on existing domestic loans, current and future required Basel ratios and current harm to book ratios of the bank or banks you have chosen and any other relevant information. You have to provide a summary of your chosen banks financial strengths and weakness relative to competitors. Consider any competitive advantages that Chinese banks might have in trying to internationalise in relation to any weaknesses of European or US banks at the present time in lines of funding availability, currency related issues, term of loans, regulatory ratios, ownership structure etc.II. Consider reasons wherefor e Chinese domestic banking is likely to be less profitable from 2012 onwards compared with forward years (consider interest margins and loan write-offs and any other factors). Consider in which countries a bank might best open overseas operations, what commercial banking products and services might be offered and why. Consider products and services to be offered to Chinese companies doing business abroad and also local companies in the foreign market which may or may not do business with China. relieve oneself reasons why you think a Chinese bank could gain competitive advantage in these markets with the different types of customer they might attract. Also consider where you might put the international head office of such a bank and whether the senior care in a country should be natives of that country or expatriate managers from China. III. Chinese banks are currently in the main commercial banks involved in lending, trade financing, foreign exchange services and leasing.Conside r the other types of products and services, in particular investment banking and asset management services, that they might want to offer outside China and the advantages and possible drawbacks of trying to compete with US investment banks in such products. Finish with a recommendation on the scope of products the bank should offer. IV. If you recommend that your bank should go ahead with an internationalisation programme, advise it on the relative merits of a new-made start-up bank versus a policy of acquisition of local banks in the chosen markets. You might, for example, suggest that the bank acquire RBS from the UK government.V. Japanese commercial and investment banks have not been very successful in their internationalising efforts (see Chapter 27 of your textbook). Consider the economic, heathenish and foreign branch/ subsidiary management, employee and governance (and any other) issues that might have hindered their development. Consider how a Chinese banks may, or may not , be able to overcome these same difficulties. Citigroup has also proven not to be very successful. You should examine what its strategy was and why it collapsed (rescued by the US government) and why it is now downsizing and simplifying.RBS has also cut back its investment banking activities dramatically. You should consider why it has done this. Some articles from the FT that might be useful in this endeavour are included on Blackboard under consort Documents. However, it is important that you access other sources of information which may include close information that you have access to. You should give references where appropriate. Brian Scott-Quinn 1 . Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China