Bank2B- The "new logic" of corporate banking -Part 4

The core business logic of corporate banking should be: value orientation + risk orientation.

Re-examining corporate banking business from the perspective of the "second half of the banking industry", we can draw two basic judgments:

1. Under the traditional spread model, corporate banks can only obtain the average profit of the market.

2. Under the new model (non-interest income), corporate banks can obtain excess profits, but they need very special "capabilities."

What is this ability? We can use a simple formula to explore.

From the perspective of products and services (supply), corporate banking is simplified into transaction banking (which also includes basic businesses such as accounts, payment, and settlement, and on-balance sheet credit) and investment banking. Therefore, corporate banking can be simplified as follows:

Corporate Bank (Value) = (Investment Bank + Transaction Bank) × Service

Decomposing this formula is:

Corporate Bank (Value) = Investment Bank × Service + Transaction Bank × Service

Obviously, service is the most important variable. According to the particularity of the B-terminal market mentioned above, the root cause lies in industry differences and customer group differences. Therefore, we need to take service as one of the variables, and substitute specific industries and customer groups into corporate banking services. The formula evolves into:

Corporate Bank (Value) = a certain industry × investment bank × service + a certain industry × transaction bank × service

Therefore, corporate banking essentially requires precise industrialization and hierarchical and categorized business operations.