Comprehensive SWOT Analysis of China CITIC Bank – China’s Seventh-Largest Lender

Quick Stats on China CITIC Bank

Founder	Rong Yiren
Year Founded	1987
Origin	Beijing, China
No. of Employees	34,500+
Company Type	Public
Market Cap	$260.58 Billion (2022)
Annual Revenue	RMB195,399 Million (2020)
Net Income/ Profit	RMB140,846 Million (2020)

 

Product & Services by China CITIC Bank

Being one of the oldest bank in the world:

• Wealth management
• Personal banking
• Wholesale banking
• Finance and insurance consumer 
• Loans and credit products
• Cash management and Treasury service
• external financing
• Foreign exchange transactions
• Loans
• International settlement
• Finance leases and deposits

Competitors of China CITIC Bank 

Being one the largest banks to be rated in the top 10 in the market, it still has a lot of competitors all over the world. Below are the top competitors of China CITIC Bank:

• CITIC Securities
• Raiffeisen Bank International
• Bank of Arkansas
• Bank of China Hong Kong
• Caixa

Now that we have seen the history of the company, Let us move to the structured SWOT analysis of China CITIC Bank. 

SWOT Analysis of China CITIC Bank

SWOT analysis of China CITIC Bank analyzes its strengths, weaknesses, opportunities, and threats. It deals with two factors: internal and external. Strength and weakness are based on internal factors whereas opportunities and threats rely on external factors of the bank.

To better understand the SWOT analysis of China CITIC Bank, refer to the infographics below.

Below is a step-by-step detailed guide to help you with the SWOT analysis of China CITIC Bank.

Strengths of China CITIC Bank

Strengths are the firm’s capabilities and resources that it can use to design, develop, and sustain a competitive advantage in the marketplace.

• Brand Significance: The bank was the 72nd largest in the world by total assets and 67th in the world in terms of tier-1 capital. Also, currently, the bank holds 7th position on the largest banks in China and it is continuously placed in the top 1000 world banks ranking. 
• Functioning Efficiency: China CITIC Bank is one of the foremost in the sector to localize its overseas procedures to improve its functional efficiency. It executed this by maintaining a close alliance with the monetary associations of approximately 20 nations.
• Strong Customer Base: China CITIC Bank has an extended network of banks and customers which gives it a sturdy ground for scaling and income generation. The bank has 773+ household branches and around 27+ overseas associations and banks globally in almost 130 countries. It has approximately 51 million individual customers.
• Various Businesses: Unlike other banks, it has a diversified portfolio of its revenue streams. This enables them not to be dependent on anyone’s service. It has adopted a versatile banking model, along with conventional banking, investment banking, asset management, insurance, and wealth management.
• Highly Capitalized: China CITIC Bank has proven to be a highly capitalized company in the past. It will surely be able to withstand any type of crisis in the future and wouldn’t need to rely on the government during the crisis.

Weaknesses of China CITIC Bank

Weaknesses of China CITIC Bank can either be an absence of strengths or resources of capabilities that are required but at present, the organization doesn’t have.

• Former President Taking Bribes: In Feb 2022, the former president of China CITIC bank had admitted taking nearly 1 billion yuan which is $154 Million in bribes. The misuse of the position has reduced the image of China CITIC Bank.
• Weak in Exploring Niche Markets: Niche markets and local monopolies that companies like China CITIC Bank can exploit are fast disappearings. The customer network that China CITIC Bank has promoted is smaller and less effective.
• Declining Per-unit Revenue for China CITIC Bank: Competitiveness in the industry is putting downward pressure on profitability. A starting guide to managing this situation for the company is, objectively assessing the present value propositions of the various products.
• Easily Imitable Business Model: The Business Model of China CITIC Bank can be easily imitated by the competitors in the industry name industry. To overcome these challenges company name needs to build a platform model that can integrate suppliers, vendors, and end-users.
• Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas, China CITIC Bank needs to invest more funds in technology to coordinate the processes across the board. Currently, the investment in technology is not on par with the vision of the company.

Opportunities for China CITIC Bank

Opportunities are potential areas where the firm can identify potential for growth, profits, and market share.

• The Trend of Customers Migrating to Higher End Services: It represents a great opportunity for China CITIC Bank, as the firm has strong brand recognition in the premium segment, and customers have experience with excellent customer services provided by China CITIC Bank in the lower segment. It can be a win-win for the company and provides an opportunity to increase profitability.
• Moderate Growth Rate: Following a moderate growth rate in the business, a financial uptick and increase in client spending provide an opportunity for China CITIC Bank to attract new clients and increase its share of the total industry.
• Customer Preferences are Fast-changing: Driven by rising disposable incomes, easy access to information, and fast adoption of technological services, customers today are more willing to try new services in the market. China CITIC Bank has to carefully monitor not only wider trends within the regional banks’ industry but also in the wider financial sector.
• Beneficial Government Regulations: Increasing government regulations are making it difficult for unorganized players to operate in the regional banks’ industry. This can provide China CITIC Bank with an opportunity to increase its customer base.
• Development of Technology: Since the FinTech industry is growing at a very rapid pace, there are advancements in technologies too. Using these kinds of technologies can increase efficiency and decrease cost.

Threats to China CITIC Bank

Threats are factors that can be potential dangers to the firm’s business models because of changes in macroeconomic factors and changing consumer perceptions. Threats can be managed but not controlled.

• Trade Relation Between US and China can affect China CITIC Bank’s Growth Plans: This can lead to a full-scale trade war which can hamper the potential of China CITIC Bank to expand operations in China.
• Competitors Catching up with Product Development: Even though at present the China CITIC Bank is still the leader in product innovation in the regional banks’ segment, it is still facing stiff challenges from international and local competitors. 
• Global Competitors: If China CITIC Bank wants to expand their business around the world, they have to be careful of what policies they make or how they provide their services in the foreign market, or how they market themselves, where already existing local banks are what the people trust in. 
• Increased Marketing Efforts: Due to the rise of digital marketing, there is an increasing number of promotional messages which are being sent by competitors. It clutters up the space, which leads to losing out on customers. China CITIC Bank is well versed and trying to adopt a variety of the latest digital marketing skills to get ahead of the competition. You must also check out these skills to achieve the same.

Now that we have come to the end of this thorough SWOT Analysis of China CITIC Bank. Let’s see the summation of this article in the conclusion.