Under the increasingly strict supervision, the compliance of banking financial institutions, which account for more than 90% of the assets of the financial industry, has attracted much attention. In the first quarter of 2024, what is the compliance level of the large banking financial institutions?
According to the statistical analysis of Southern Weekly's "Shepherd Dog - China Financial Industry Compliance Cloud Platform" (hereinafter referred to as the "Shepherd Dog Platform"), the People's Bank of China, the State Administration of Financial Supervision and Administration and the State Administration of Foreign Exchange (hereinafter referred to as "one bank and two bureaus") and three local dispatched agencies issued more than 1,700 fines in the first quarter, involving a fine amount of about 470 million yuan, and the number of fines and fines decreased significantly from the previous quarter. Among them, the frequency and amount of fines imposed by rural commercial banks ranked first, and urban commercial banks, including Qilu Bank, received two of the five major high-value fines.
While the overall compliance of the industry has improved, there have been frequent violations of the prudential business principle in the lending sector, including personal business loans, credit cards and personal mortgage business.
Institutional fines and fines have dropped significantly
According to the different types of fines, the Southern Weekly New Finance Research Center divides fines into two categories: individual fines and institutional fines. The number of fines is based on the number of ticket information.
In the first quarter, both the number of fines and fines showed a downward trend compared with the previous quarter. Among them, the number of institutional fines and fines decreased significantly, down 27% and 51% respectively from the previous quarter. In contrast, the decline in the number of fines and fines for individual items was limited, both down about 10% from the previous quarter. At the same time, the proportion of individual fines is still high (63.5%) and the proportion of fines is relatively small (4.2%).
In the first quarter, the average value of fines for institutions was 715,000 yuan, and the average value of fines for individuals was 18,300 yuan. Both averages decreased to varying degrees from the previous quarter, especially the number of institutional fines decreased significantly, exceeding 30%.
According to the Southern Weekend New Finance Research Center, the decrease in the number of fines and fines in the first quarter may be related to the strengthening of penalties by local regulators in the fourth quarter of 2023. The Central Financial Work Conference held at the end of October 2023 clearly listed the strengthening of financial supervision as one of the four major measures to build a financial power, and emphasized that resolving financial risks is an important goal of financial supervision. Under such circumstances, it is appropriate for regulators to strengthen management by the end of 2023. At the same time, the regulatory environment may also be an important factor for practitioners and institutions to strengthen self-management.
Shandong has the most fines, and Zhejiang has the highest fines
Which regions have the highest number of fines, and which provinces and cities have the highest fines?
According to the statistical analysis of the data of the Shepherd Dog Platform by the New Finance Research Center of Southern Weekly, in the first quarter, Shandong, Jiangxi and Jiangsu ranked among the top three in terms of the amount of ticket information. Among them, Shandong has the largest number of individual fines and institutional fines, with 108 and 75 respectively. The regions with the lowest two indices were Ningxia (1), Tibet and Tianjin (both 2).
However, the amount of institutional fines in Zhejiang was the highest, at 46.563 million yuan, accounting for nearly 1/10 of the total institutional fines. The region with the lowest amount of fines was Tibet (800,000 yuan).
According to the Southern Weekly New Finance Research Center, the number of fines is related to three factors: First, practitioners and institutions have illegal business practices. Second, the supervision of local regulators in different periods also has a certain impact. Third, it is related to the activity of local financial behavior.
Rural commercial banks were fined a large number of people, but the fines were small
Under the good trend that the number of fines and fines in the country has dropped sharply month-on-month, the "appearance rate" of rural commercial banks is quite high.
According to the Southern Weekend New Finance Research Center, in the first quarter, the number and amount of fines issued by employees of rural commercial banks ranked first among the fines imposed on individuals, while the number and amount of fines received by rural commercial banks also ranked first among institutional fines. What is more noteworthy is that there is no significant change in the punishment of ABC businessmen from the previous month. This means that the illegal operation of rural commercial banks has not been effectively improved.
From the perspective of the average fines, in the first quarter, the average fines for individual items of rural commercial banks were 15,000 yuan/piece, a slight decrease from the previous quarter, and the average fines for institutions were 640,000 yuan/piece, rising "against the market".
Although institutions and individuals are fined a large area, due to the limited incidence of large-value fines, the average fines of individual and institutional fines of rural commercial banks are lower than the average of the banking industry. The Southern Weekend New Finance Research Center also found that among the fines received by rural commercial banks, the maximum fine amount was 5.6 million yuan, and the number of large fines exceeding 5 million yuan was not as high as that of urban commercial banks.
A senior banker told the Southern Weekly New Finance Research Center that compared with large state-owned banks and joint-stock banks, rural commercial banks are not yet familiar with a complete business system. Over the years, due to multiple factors such as lack of talents, backward operation and management, and weak risk control, there is great room for improvement in the internal control system of rural commercial banks.
However, the market and regulatory environment faced by rural commercial banks is not optimistic. According to data disclosed by the State Administration of Financial Supervision and Administration, as of the end of 2023, the non-performing loan ratio of rural commercial banks reached 3.34%, much higher than the corresponding indicators of large state-owned banks, joint-stock banks and urban commercial banks. The capital adequacy ratio of about 12% of rural commercial banks is also lower than the industry average of about 15% in the same period. How to find the balance between growth and risk management in the context of economic downturn and meager industry profits is testing the managers of rural commercial banks.
City commercial banks occupy two of the five major fines, and Qilu Bank was fined nearly 15 million
Like the rural commercial bank community, the urban commercial bank group is also very large.
The Southern Weekend New Finance Research Center combed through the database of the Shepherd Dog platform and found that in the first quarter, among the fines of banking institutions, there were five large fines of more than 5 million yuan, and city commercial banks occupied two seats. Among them, Qilu Bank received the highest fine, about 14.95 million yuan.
The State Administration of Financial Supervision and Administration issued as many as 15 reasons for punishment, and these violations cover almost all of the most important compliance aspects. At the same time, three responsible persons of the bank were fined. This shows that Qilu Bank has management weaknesses in multiple business lines, and it is not an illegal operation of individual employees.
Qilu Bank has not publicly responded to the matter. Qilu Bank is one of the first city commercial banks in China and the first in Shandong Province to set up and introduce overseas strategic investment, and was listed on the Shanghai Stock Exchange in June 2021. According to the 2023 performance report, the bank is in a period of balance sheet expansion with rapid growth in assets and liabilities. As of the end of 2023, the bank's total assets increased by nearly 20% year-on-year. Among them, the growth rate of total loans and total deposits exceeded 16% and 13% respectively, and the growth rates of operating income and net profit exceeded 8% and 18% respectively.
Mengshang Bank was also fined a large amount of $8.93 million. The regulator imposed penalties on the grounds of "failure to comply with customer identification obligations, and failure to submit large-value transaction reports and suspicious transaction reports as required". Compared with Qilu Bank, Mengshang Bank's fine-related areas are relatively concentrated, and there is no general problem of inadequate management in Qilu Bank.
Internet Bank, Jilin Yilian Bank, Rural Commercial Bank, and Ningbo Yinzhou Rural Commercial Bank also ranked among the top five in the industry in terms of fines.
Violation of the principle of prudent operation is the main reason for the fine
Among the more than 1,700 fines, what are the areas where violations of laws and regulations are concentrated?
Southern Weekend's New Financial Research Center retrieved the relevant keywords of the shepherd dog platform ticket case and learned that the violation of the principle of prudent operation is one of the important reasons. It appears more than 200 times in all fines and involves a variety of business areas, such as loans and inter-bank transactions. Among them, there were more than 50 violations of the prudential business principle in the loan sector, and the subdivision items covered retail business areas such as personal mortgage loans, credit card installments and personal business loans.
Southern Weekend's New Finance Research Center further searched for specific fines and found that a total of 8 fines were issued to IB by the Beijing regulator for "serious violations of prudential business rules in the personal mortgage loan business", while the violations of personal business loans and credit cards were mostly found in the areas of pre-loan and post-loan management and installment consumption. At the same time, "imprudent management of real estate development loans" also appeared in the first quarter of the fines.
According to the New Finance Research Center of Southern Weekly, in the long process of becoming a financial power, regulators must pay more attention to the high-quality development of financial banks. As the main representative of the financial industry, the banking industry should adhere to the priority of high-quality development, completely abandon the inertial thinking of blindly expanding in pursuit of profits or even operating in violation of regulations, improve and strengthen the implementation of the internal risk control system, and strengthen the financial ethics training of employees, so as to reduce the occurrence of illegal business behaviors from the operational level.
Chen Yan, researcher of the New Finance Research Center of Southern Weekly, Li Yiling, Xu Zehuan, assistant researchers
Editor-in-charge: Fengyu