Everbright Bank is a bit "hanging"

When will the turning point come?

1

Flash crash

China Everbright Bank has just experienced a "flash crash".

At the opening of trading on March 28, the stock prices of Everbright Bank's Hong Kong stocks and A-shares both fell sharply. Among them, the A-share share price of Everbright Bank once fell by more than 9%, and the H-share share price fell by more than 13% at one point.

This sudden plunge made Wang Zhiheng, president of Everbright Bank, come out with an urgent response:

The fundamentals of CEB's operations are stable, and there are no major risks that should be disclosed but have not been disclosed.

In fact, from this response itself, you can see the market's concern.

The fuse was the 2023 annual report disclosed by Everbright Bank on the evening of March 27. According to the financial report, as of 2023, the total assets (group caliber) of Everbright Bank were RMB6,772.796 billion, an increase of 7.50% over the end of the previous year, the total principal of loans and advances was RMB3,786.954 billion, an increase of 6.01% over the end of the previous year, and the balance of deposits was RMB4,094.528 billion, an increase of 4.53% over the end of the previous year. These major indicators are actually okay.

The key issue is revenue and profit figures. In 2023, CEB achieved operating income of RMB145.685 billion, down 3.92% year-on-year. During the period, the net profit was 41.076 billion yuan, down 8.80% year-on-year, and the net profit attributable to shareholders was 40.792 billion yuan, down 8.96% year-on-year.

Compared with their peers, as of March 28, six large state-owned banks and seven joint-stock banks have announced their 2023 performance reports. Among the 13 listed banks, only China Everbright Bank and Industrial Bank both had negative growth in revenue and net profit.

Compared with itself, Everbright Bank's revenue has declined for two consecutive years. A few years ago, China Everbright Bank's revenue growth rate once reached 20.47%.

Looking further down, CEB's net interest income and net fee and commission income decreased by 5.43% year-on-year and 11.39% year-on-year during the reporting period. From 2019 to the first half of 2023, CEB's net interest margin fell from 2.31% all the way to 1.82%, and then to 1.74%, which is below the "warning line" of 1.8%.

At present, interest income is still the main source of income for commercial banks, and the narrowing of interest rate spreads is obviously not good news.

Seeing this data, it is no wonder that the market "voted with its feet" and came to a flash crash. In the long run, the share price of Everbright Bank's A-shares has fallen by 38% from its high point, and its market value has evaporated by more than 110 billion.

2

Fines & Complaints

Compared with the flash crash of the stock price, what worries Everbright Bank more is probably the fine from the regulator.

Since 2024, on January 4 alone, the Jilin Supervision Bureau of the State Administration of Financial Supervision has issued seven fines to Everbright Bank, involving matters such as "non-compliance in loan payment management and illegal handling of bill acceptance without real trade background".

According to incomplete statistics, in 2023, the State Administration of Financial Supervision and Administration announced a total of 38 fines involving Everbright Bank and its branches or relevant responsible persons, with a total penalty of 9.055 million yuan.

According to the statistics of "Tiantian Finance", in 2022, Everbright Bank was issued a total of 66 fines, with a fine amount of 30.84 million, ranking 5th among the 12 joint-stock banks.

Earlier, according to the statistics of Phoenix.com Finance's "Bank Eye", Everbright Bank was administratively punished at least 14 times in 2021, with a total fine of 4.21 million yuan.

If the ticket represents the attitude of the regulator, then the complaint reflects the voice of the user.

According to the notice issued by the State Administration of Financial Supervision and Administration, in the first quarter of 2023, the median number of complaints filed by joint-stock commercial banks was 2,489, of which 3,045 were filed by China Everbright Bank, accounting for 10.5%. This number of complaints ranks third among joint-stock commercial banks. Among them, there were 2,312 complaints related to credit card business, accounting for more than 75%.

In addition, searching for "Everbright Bank" on the Black Cat complaint platform, there are a total of 10,168 related complaints. These complaints mainly focus on credit card fraud, forced processing fees, violent collection, etc.

Despite the numerous fines and complaints, the salaries of CEB's executives are not low. According to data from Oriental Wealth Network, the remuneration of many senior executives of Everbright Bank exceeds 1 million yuan, and the remuneration of several employee supervisors exceeds 2 million yuan.

With these highly-paid executives, it's time to take a look inside China Everbright Bank.

3

Financial Anti-Rotten "Chongqi District"

However, these executives themselves are often "worried".

Back in July 2023, according to the website of the Central Commission for Discipline Inspection and the State Supervision Commission, Tang Shuangning, former secretary of the Party committee and chairman of China Everbright Group Co., Ltd., is suspected of serious violations of discipline and law, and is undergoing disciplinary review and supervision investigation.

Prior to this, Li Xiaopeng, former chairman of Everbright Bank, former secretary of the Party committee and chairman of China Everbright Group, was investigated on suspicion of serious violations of discipline and law.

Stretching the time a little longer, according to the incomplete statistics of "Salt Pickers", since 2021, more than 10 senior executives of Everbright Group's system have been dismissed, and Everbright Bank has also become the focus of financial anti-corruption.

Among these fallen executives, there are many heavyweights. For example, Xia Wei, former general manager of the transaction banking department of Everbright Bank, Zhang Huayu, former deputy secretary of the Party Committee and vice president of Everbright Bank, and Zhou Jiangtao, former secretary of the party committee and president of Nanning branch of Everbright Bank, etc.

Such a large-scale management collapse, which is rare among joint-stock banks, also shocked the outside world.

From a broader perspective, central bank data shows that as of the end of 2022, the total assets of China's financial institutions were 419.64 trillion yuan. Among them, the total assets of banking institutions accounted for 379.39 trillion yuan, accounting for more than 90%.

It is precisely for this reason that the discipline inspection and supervision departments have found that banks tend to have a high incidence of corruption due to the concentration of power, the concentration of funds, and the abundance of resources.

For China Everbright Bank, a major change in management followed.

According to the data, since 2020, Everbright Bank has gone through three chairmen, namely Li Xiaopeng, Wang Jiang and Wu Lijun. In addition, during the same period, CEB changed three presidents, and the appointment and resignation of vice presidents involved seven people. In recent years, there have been as many as 20 announcements of the resignation of senior executives of Everbright Bank.

Objectively speaking, the foundation of Everbright Bank is still very good. The fundamentals are solid, and the financial indicators are also in the forefront of the industry. However, it should also be known that with the tightening of financial supervision, the aftermath of anti-corruption has not yet ended, and the "alarm" of Everbright Bank has not yet been lifted, and the suspense is still there.

The hardest moment may not be yet to come.