The downsizing of organizational structures and the optimization of functions represent a common direction for the headquarters-level reforms of national banks.
Recently, China Merchants Bank officially put its new headquarters building into use at the Shenzhen Bay Super Headquarters Base. On July 6, the former "Head Office Business Department" located on the ground floor of the building's T2 tower resumed operations at the new site, but the signage above has already changed.
On July 8, the Shenzhen Financial Regulatory Bureau approved the renaming of CM BANK's Shenzhen Head Office Building Business Department to "Shenzhen Shenzhen Bay Central Sub-branch, CM BANK Co., Ltd." The "Head Office Business Department," established in 1999, has officially exited public view.
This was not a simple relocation and name change. The dismantling of CM BANK's head office business department was carried out in two steps over five years.
The first step occurred on January 1, 2021. That year, CM BANK announced the change of the original "Head Office Business Department, CM BANK" to "Shenzhen Head Office Building Business Department, CM BANK Co., Ltd." The addition of "Shenzhen" and "Building" to the name signified a downgrade in administrative level. This core branch, once at the same level as the Shenzhen branch and directly under the head office, was officially placed under the jurisdiction of the Shenzhen branch, becoming an ordinary comprehensive sub-branch, on par with urban sub-branches like Luohu, Shekou, and the Central District.
Following that adjustment, its actual authority and resource allocation capabilities were already stripped of its previous head office direct affiliation, with the "Head Office" title retained only as a transitional term.
The second step was this year's relocation. The new building is no longer called "Head Office Building" but "CMB Global Financial Center." Following the regulatory convention of naming branches after geographic locations, the "Head Office" identifier lost its physical carrier and was completely removed. The site and business at the old Futian Chegongmiao location have been taken over by the Shenzhen Xiangmihu Sub-branch, with customer accounts remaining unaffected.
Notably, another joint-stock bank in Shenzhen, Ping An Bank Co.,Ltd., also completed the closure of its head office business department during the same period. However, Ping An Bank Co.,Ltd.'s approach was more decisive: in 2021, the former Shenzhen Banking and Insurance Regulatory Bureau approved the opening of the Shenzhen Ping An Bank Building Sub-branch, which directly took over the site and all business of the original Ping An Bank Co.,Ltd. Head Office Business Department. This was a one-step process – the independent entity was dissolved, the direct relationship was severed, and the name was completely changed, with no transition period. From that year onwards, Ping An Bank Co.,Ltd.'s head office no longer conducts direct external business, retaining only management functions.
The head office business department has indeed been a unique entity within the banking system. Generally, ordinary sub-branches are managed by the city branch, and city branches are managed by the provincial branch. However, the head office business department reported directly to the head office, was at the same level as the provincial branch (first-tier branch), and its personnel, finances, and assets were independent of the local branch system. Compared to other branches, the customer base of the head office business department would naturally correspond to "head office-level" clients. Currently, large state-owned banks, joint-stock banks, and city and rural commercial banks have different arrangements for their head office business departments.
Among the large state-owned banks, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China all maintain independent head office business department structures.
For joint-stock banks, the head office business departments of China CITIC Bank and China Minsheng Bank were both established in 1996 and are still operational. Most joint-stock banks headquartered in Beijing/Shanghai, such as China Everbright Bank, Shanghai Pudong Development Bank, and Industrial Bank, still retain their structures, but their actual functions are weakening. The direction for CM BANK and Ping An Bank Co.,Ltd., both headquartered in Shenzhen, is clear: as business has become national, the local relevance of the head office business department has diminished; the trend towards reducing layers and flattening management is strong, as eliminating a business entity on par with a branch effectively reduces the management radius; and the pressure to cut costs and increase efficiency in a low-interest-rate environment makes centralized management a pressing need.
However, the head office business departments of city commercial banks are more stable. The reason for not closing them is also clear: their business is largely concentrated in their headquarters' city, making the head office business department their largest core branch. Serving the local municipal party committee, government, and state-owned enterprises is a core business for city commercial banks, and the issue of "de-layering" does not apply.
Overall, adjustments to head office business departments will not lead to a blanket wave of closures across the entire industry. However, the downsizing of organizational structures and the optimization of functions will be a common direction for the headquarters-level reforms of national banks.
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