Edit | Yuer Lake
出品 | 潮起网「于见专栏」
In recent years, large commercial banks have extended their tentacles to county towns and even rural areas after bottlenecks in the performance growth of first- and second-tier cities. The prevalence of inclusive small and micro enterprise loans in counties and townships has also put tremendous pressure on rural commercial banks, which already have very limited living space.
The main body of rural commercial banks represented by Jiangsu Zijin Rural Commercial Bank Co., Ltd. (also known as Zijin Rural Commercial Bank, hereinafter referred to as Zijin Bank) has gradually lost its original advantages due to the sinking of the market of large state-owned banks and commercial banks, and it is urgent to transform and break through.
According to the 2023 "China's Top 500 Most Valuable Brands" ranking data recently released by GYbrand, a brand value evaluation agency, Shanghai Rural Commercial Bank ranks first in the latest ranking of the top 10 rural commercial banks in terms of brand value. At the same time, the bank ranked 208th among the top 500 Chinese brands. Zijin Bank, on the other hand, ranked 10th among rural commercial banks and was not on the top 500 list.
It can be seen that Zijin Bank does not have too many brand advantages among all banking enterprises. Even if it is subdivided into rural commercial banks, its industry status is "not up or down", which is very embarrassing. If the brand value ranking of third-party institutions is just a false name, then the performance and stock price of Zijin Bank in recent years are enough to show that there may still be some problems in the development of Zijin Bank.
However, in the third quarter, Zijin Bank's revenue declined. According to the data, from July to September 2023, the bank achieved revenue of 1.187 billion yuan, a year-on-year decrease of 1.72%.
The decline in performance dragged the industry back, and the Tier 1 capital adequacy ratio was at the bottom
According to the financial report for the third quarter of 2023 released by Zijin Bank, in the first three quarters of 2023, Zijin Bank achieved operating income of 3.39 billion yuan, a year-on-year increase of 0.43%, and net profit attributable to the parent company of 1.349 billion yuan, a year-on-year increase of 5.8%. Although Zijin Bank's revenue and net profit both increased in the first three quarters, its revenue recorded 1.187 billion yuan in the third quarter, a year-on-year decrease of 1.72%.
According to the analysis, Zijin Bank's revenue decline in the third quarter may be mainly due to the decline in its net interest income. According to the financial report data, in the third quarter of 2023, the bank achieved net interest income of 1.019 billion yuan, a year-on-year decrease of 3.32%.
In fact, Zijin Bank's poor performance has long been symptomatic. Taking the 2022 financial report a year ago as an example, in mid-February 2023, nearly 20 banks released their 2022 performance reports.
Judging from the performance report data in 2022, 20 banks have performed very well in key indicators such as profitability, asset quality, and provision coverage ratio, and even 18 of them have maintained double-digit growth in net profit. Among them, the net profit attributable to the parent company of Jiangsu Bank, a city commercial bank in Jiangsu, increased by more than 30%, while the growth rate of this indicator of Sunong Bank, a rural commercial bank, was as high as 29.40%. In contrast, Zijin Bank's performance indicators are also a bit "cold".
For example, Zijin Bank's revenue in 2022 will be 4.5 billion yuan, a year-on-year increase of only 0.11%, and its net profit will be 1.6 billion yuan, a year-on-year increase of only 5.68%. In the midst of a number of thriving performances, whether it is the scale of its revenue or the single-digit growth rate, it does have the meaning of "holding back" the listed banks.
Returning to the third quarter of 2023, when the latest earnings report was announced, its capital adequacy ratio metrics are also worrying. According to the financial report data, as of the end of September 2023, the bank's core Tier 1 capital adequacy ratio was 10.21%, down 0.21 percentage points from the end of the previous year, while the Tier 1 capital adequacy ratio was 10.21%, down 0.21% from the end of the previous year, and the capital adequacy ratio was 13.99%, down 0.36% from the end of the previous year.
In addition to the declining capital adequacy ratio, it is also worth noting that compared with other listed rural commercial banks, Zijin Bank's Tier 1 capital adequacy ratio is even lower. Although Zijin Bank has replenished its capital through external sources such as internal sources and the issuance of convertible bonds in recent years, the bank's convertible bond conversion rate is relatively low, and the replenishment of capital is very limited, so investors are very worried.
Asset quality is worrying and profitability is questionable
As we all know, as a banking enterprise, risk control is also one of the core indicators of its performance. Fortunately, in terms of risk indicators, Zijin Bank has "improved", and as of the end of September, its non-performing loan ratio was 1.16%, a new low.
There is no harm without contrast. Although compared with its own past, Zijin Bank's non-performing loan ratio continues to improve. However, compared with other commercial banks and even rural commercial banks, their non-performing loan ratios are still at a high level. For example, the non-performing loan ratios of Changshu Bank, Wuxi Bank and Zhangjiagang Bank were 0.75%, 0.81% and 0.95% in the same period.
In fact, Zijin Bank has a long history of high non-performing loan ratios and poor asset quality. Even its prospectus and financial report data before and after its listing show that Zijin Bank's risk control has been at a low level, and its asset quality is worrying.
For example, when Zijin Bank released its first financial report after listing, the regulator questioned the bank's high non-performing loan ratio, saying: "In the past three years, the non-performing loan ratio of the applicant's corporate business has increased year by year, to 1.90%, 1.84% and 2.04% respectively, and the non-performing loan ratio of small enterprises has increased significantly, which is 2.47%, 2.97% and 4.22% respectively." ”
Although Zijin Bank said in response to the inquiry that from the end of 2017 to the end of 2019, the non-performing loan ratio of issuers decreased year by year, and the proportion of concerned loans generally showed a downward trend. However, it is undeniable that its asset quality level ranks very low among the listed rural commercial banks in Jiangsu Province, and even among the current rural commercial banks, there are few banks with a non-performing loan ratio higher than 1%.
It is understood that Zijin Bank's non-performing loan ratio has gradually refined in recent years, thanks to the bank's centralized collection and disposal of a certain amount of non-performing loans by optimizing the assessment mechanism, setting up a collection team of the head office, establishing a non-performing hearing mechanism, strengthening skills training, and digging deep into the stock of non-performing loans.
However, at present, with the continuous expansion of its asset scale, there is still a long way to go to optimize its asset quality.
In addition, the profitability of Zijin Bank was once questioned by investors. Take the first half of 2022, when net profit attributable to the parent company increased by more than double digits, as an example. At that time, Zijin Bank achieved revenue of 2.166 billion yuan, a year-on-year increase of 2.64%, and net profit attributable to the parent company of 824 million yuan, a year-on-year increase of 10.05%. However, the double-digit growth in net profit is based on a low base in the first half of 2021.
According to the financial report, in the first half of 2021, Zijin Bank achieved revenue of 2.111 billion yuan, down 14.40% year-on-year, and net profit attributable to the parent company of 749 million yuan, a slight increase of 2.72% year-on-year, far lower than the average level of A-share listed rural commercial banks.
Compared with the six listed rural commercial banks in Jiangsu, Zijin Bank's asset scale is second only to Changshu Bank, but it only increased by 2.47% year-on-year. Perhaps it is precisely because the growth rate is "inferior to others" that Zijin Bank, which was originally the leader in terms of asset scale, was also overtaken by Changshu Bank in 2021.
You must know that in 2019 and 2020, Zijin Bank's total assets have taken the lead in exceeding 200 billion yuan. However, today, the gap between Zijin Bank and Changshu Bank in terms of asset scale and performance growth rate is getting wider and wider.
The corresponding growth rate of net profit attributable to the parent company is too low, which is a "hard injury" for Zijin Bank. According to the data, as of the end of September 2022, Zijin Bank's revenue and net profit grew by only single digits, with year-on-year growth of 2.04% and 7.23%, respectively. Its net profit growth rate is at the bottom compared with the double-digit growth rate of the other five banks. Therefore, it is not difficult to understand why Zijin Bank is gradually falling behind.
Executives are in turmoil, frequent fines, and internal control loopholes cannot be ignored
The steady development of an enterprise is inseparable from the joint efforts of a team of professionals. Zijin Bank's development in recent years has not been smooth, which may also be related to the frequent changes in its senior management.
It is understood that Zijin Bank's personnel changes have become more frequent since its listing. Some people even joked that the frequency of senior management changes at Zijin Bank in the past few years far exceeded the frequency of personnel changes in many banks for decades.
In fact, this statement is not an exaggeration at all. For example, Zhang Xiaojun, who has been the chairman of Zijin Bank since August 2014, has been the chairman of the company since the end of August 2020 due to retirement age, and has been replaced by the then president of Zijin Bank.
In just about a year, Zijin Bank issued a notice saying that the new chairman of Zijin Bank stepped down due to work adjustments. Until the end of January 2022, Zijin Bank appointed Zhao Yuankuan as the fourth chairman of Zijin Zijin Bank. At the same time that Zijin Bank disclosed that Zhao Yuankuan's qualifications for the post of chairman were approved, the company also disclosed that Zhu Ming was elected as the company's vice chairman.
The frequent changes in the top management have obviously had an adverse impact on the development of Zijin Bank. In particular, Zhang Xiaojun's tenure coincided with a period of rapid growth in Zijin Bank's revenue scale. In addition, the repeated changes of chairman and vice chairman since then have made it difficult for the bank's policies to be implemented stably. Facts have proved that although Zijin Bank has changed the leadership of the younger generation, its performance is still uneventful.
What is more noteworthy is that Zijin Bank has also been frequently punished for illegal operations in recent years. For example, in August 2019, Zijin Bank was given a warning and fined 1.888 million yuan by the Nanjing branch of the People's Bank of China for violating the Administrative Measures for Electronic Commercial Draft Business and other laws and regulations.
In October of the same year, Zijin Bank received three fines in a row. For example, its sub-branch has been punished by the China Banking and Insurance Regulatory Commission, Jiangsu Supervision Bureau and other departments for improper means of absorbing deposits, failing to manage post-loan and seriously violating the principle of prudent operation.
Coincidentally, at the beginning of 2022, the Zhenjiang Branch of Zijin Bank was fined 400,000 yuan by the Zhenjiang Supervision Branch for failing to fulfill its responsibilities in the "three checks" of personal operating loans.
In addition, Zijin Bank has also caused an "oolong" incident because of errors in the financial report data. According to media reports, Zijin Bank had to issue a correction statement due to data errors when it released its 2021 annual report.
Half a year later, when Zijin Bank released its performance report, it violated the relevant regulations of listed companies because of its temporary decision to release the performance report in advance. It is understood that the relevant regulations of the China Securities Regulatory Commission clearly stated: "Directors, supervisors and senior managers of listed companies shall not buy or sell the company's shares within 10 days before the announcement of the performance report." ”
The fund bank did not fully consider the interval between the release time and the time when the directors, supervisors and senior executives purchased the shares, resulting in the release date of the bank's performance express report being less than 10 days from the time when some of its executives purchased the shares, and passively triggered the relevant regulations and violated the regulations, and finally had to come forward to apologize.
Industry insiders believe that Zijin Bank's frequent financial report data omissions and business violations may be enough to show that the company lacks a sense of overall planning and compliance with relevant laws and regulations, which also exposes obvious loopholes in its internal operation and management.
epilogue
As a rural commercial bank with not too small assets and not too weak strength, the development of Zijin Bank has indeed made investors have some "hatred of iron but not steel". On the whole, Zijin Bank's performance lagging behind and its competitiveness are inferior to those of its peers, which may be related to the turbulence of its senior executives, overly extensive operation and management, and insufficient risk control.
However, it may not be easy for Zijin Bank's new management team to eradicate the "stubborn diseases" accumulated over the years of development. It is hoped that the capital bank can rely on its advantages in the scale of hundreds of billions of yuan in assets to eliminate internal and external troubles as soon as possible in the new financial environment, so as to become one of the most commendable players in the field of rural commercial banks.