Introduction: Bank of Gansu is the first listed city commercial bank in the northwest region, but its revenue scale has continued to shrink since its listing, and the non-performing rate is higher than the average of urban commercial banks in the region. The decline in asset quality is also reflected in the non-standard business, and the Bank of Gansu appeared in the list of bondholders in the Peking University Founder bankruptcy case.
Bank of Gansu strives to break through in its personal business and capital market business, but it still faces the dilemma of rapid increase in non-performing rates, and the risk control of some pledge businesses has yet to be tested.
Digression:
On the evening of October 15, Jiangxi Bank issued an announcement that after consideration and evaluation by the board of directors, Luo Yan's management style and philosophy were not completely consistent with the bank's business development and actual needs, and it was recommended to dismiss Luo Yan as an executive director, vice chairman, member of the board of directors strategy committee and member of the remuneration and nomination committee, dismiss Luo Yan from his position as president, and let chairman Chen Xiaoming perform the duties of the president. This resolution is effective as of October 15.
Jiangxi Bank was listed in June 2018, and Luo Yan became the president of Jiangxi Bank in February of the same year. In other words, in the fourth month of his tenure as president of Jiangxi Bank, Jiangxi Bank was listed. In the past three years after the listing, Jiangxi Bank's performance has declined year by year, and its stock price has continued to decline, from the highest point of 7.27 Hong Kong dollars in the year of listing to the current 3.5 Hong Kong dollars, and at the end of September last year, it once fell to the lowest point of 2.72 Hong Kong dollars, down more than half, and has already fallen below the issue price.
Scale stories don't make sense
Non-standard business has greater risks
Bank of Gansu is the first listed city commercial bank in the northwest region. As of the end of June 2021, the total assets of Bank of Gansu were 349.582 billion yuan, and the revenue in the first half of this year was 2.980 billion yuan, down 8.11% year-on-year; and the net profit was 383 million yuan, an increase of 3.90% year-on-year. According to financial data, from 2018 to 2020, the net profit of Gansu Bank was 3.440 billion yuan, 511 million yuan and 562 million yuan, and the operating income was 8.872 billion yuan, 7.233 billion yuan and 6.493 billion yuan, respectively, which decreased year by year.
Since the IPO of Gansu Bank in early 2018, it has not been recognized by the capital market, and its stock price has fallen sharply, and its issue price has fallen to HK$2.69, falling to the current HK$1.07. Like most Hong Kong-listed bank stocks, Bank of Gansu is also in a state of net breaking, with only 0.42 times the PB.
From the perspective of asset quality, the non-performing rate of Gansu Bank in recent years has "risen first and then suppressed", and the non-performing rate has declined since 2020, and this year's interim report shows that the latest non-performing rate is 2.14%. However, compared with other Domestic City Commercial Banks listed on Hong Kong stocks, the non-performing rate of Bank of Gansu is still high. Among the 21 H-share urban and rural commercial banks included in Wind's statistics, The non-performing rate of Gansu Bank ranked sixth.
There has also been a marked decline in capital adequacy ratios. From the end of last year to the end of the second quarter of this year, the capital adequacy ratio of Gansu Bank also fell from 13.39% to 12.83%, and the core Tier 1 capital adequacy ratio fell from 12.85% to 12.30%. From a regional perspective, the non-performing rate of Gansu Bank is also slightly higher. According to the special data of banks in the second quarter released by the official website of the Gansu Banking and Insurance Regulatory Bureau, the average non-performing rate of urban commercial banks in Gansu was 1.87%, which was significantly lower than that of Gansu Bank.
Moreover, the revenue growth of Gansu Bank is also weak. Gansu Bank's revenue has been declining since its IPO, shrinking by more than 10% in 2020; from January to June this year, it received revenue of 2.98 billion yuan, down about 8% from the same period last year. Looking at its revenue structure, Gansu Bank's interest income has performed steadily, but investment income has declined significantly after 2019. Analysts such as Li Weifeng and Wang Ning of United Credit pointed out that among the assets of Gansu Bank, non-standard projects such as asset management plans and trusts account for a relatively high proportion, and some projects have defaulted. In the context of the frequent outbreak of credit risks in recent years, it is difficult for The Bank of Gansu to completely stay out of the matter.
The "City Finance News" reporter found that in the bankruptcy case of Peking University Founder Group, the materials released by the bankruptcy and reorganization network to creditors showed that "China Resources Trust Gansu Bank Fixed Income Product Investment Single Fund Trust" appeared in the list of creditors, that is, The Bank of Gansu held Peking University Founder bonds through the trust channel. According to the restructuring plan announced in May this year, The cash repayment rate of Peking University Founder is low, and for ordinary creditors, including bonds, each company has less than 1 million yuan in cash, and the part exceeding one million yuan is repaid in cash + equity to pay off debts, or choose to retain debts for 8 years.
Force consumption of gold market
But the non-performing rate of personal loans is rising rapidly
The company's business is subject to the narrow market and the suppression of real estate business, and the Bank of Gansu has also made efforts in retail banking business in the past two years. The reporter noted that one of the funding parties of Jingdong Baitiao is the Bank of Gansu. If users shop in installments through JD White Stripe, the installment funds may come from the Bank of Gansu. In addition, at the end of 2019, the Bank of Gansu also launched the "Jingdong Xiaobai Credit Card" with Jingdong Finance, which can enjoy certain discounts or reductions if you spend in Jingdong.
Public data proves that the personal consumption loan business of Gansu Bank has developed rapidly, and since 2018, the total amount of personal consumption loans has increased by more than 3 times, and the growth of personal housing loans has been even more rapid. But at the same time, the non-performing rate of personal loan business has also risen rapidly: the non-performing scale of personal loans has increased by more than 5 times in the same period.
Among them, according to Wind's comprehensive data, from the end of 2017 to the first half of this year, the non-performing rate of personal housing loans of Gansu Bank rose from 0.14% to 1.31%, and personal operating loans rose from 3.22% to 18.43%.
And whether the above business model can be sustained in the future remains to be seen. Some analysts believe that with the tightening of the regulatory policy on Internet loans, The Bank of Gansu is also implementing localization and limiting of Internet loan business, and the driving role of Internet loan business on personal loans and retail business tends to weaken.
Strange Golden Emblem Wine (603919, Share Bar) stock pledge project
In addition to traditional business, Bank of Gansu also focuses on capital market business, such as stock pledge business. Take the Golden Emblem wine, for example. In 2020, Yuyuan Shares (600655, shares) controlled by Shanghai capital tycoon Guo Guangchang spent 1.837 billion yuan and became the controlling shareholder of Jinhui Liquor. Later, in the context of the bull market in liquor stocks, the stock price of Jinhui Liquor rose from 16 yuan to 56 yuan in just a few months.
After the stock price rose to a high level, Gansu Yate Investment Group Co., Ltd., the second shareholder of Jinhui Wine, pledged more than 90 million shares to the Longnan Branch of Lanzhou Bank and the Huixian Branch of Bank of Gansu on six occasions (the pledge has not been released so far). Among them, the pledge corresponding stock price of the Huixian branch of the Bank of Gansu is 43.41 yuan.
Specifically, among the above-mentioned pledges, the four pledges in December 2020 and June 2021 accounted for a relatively high proportion. Corresponding to the K-line chart, the high point of The stock price of Jinhui Wine also appeared at the end of November 2020 and June 2021, and then there was a correction. In other words, as soon as the stock price reached a high point, Yate Investment Group pledged its shares to the local bank in Gansu.
At present, the stock price of Jinhui Wine is 34.7 yuan, which has dropped significantly compared with the stock price at the time of pledge. If it continues to fall sharply, it may trigger the pledge warning line, in which case the general treatment is to supplement the collateral, but more than 90% of the shares of Yate Investment Group have been pledged.
In contrast, in July 2020, Yate Investment Group pledged about 150 million shares to Yuyuan Shares (the actual controller is also Guo Guangchang). The cost line of the pledge was between 16.41-16.97 yuan, when Jinhui Wine was still in the bottom consolidation stage, and then the stock price started to rise. Whether it is Gansu Yate Investment Group, Shanghai Yuyuan Garden, or Guo Guangchang, the actual controller of the two companies, there are large security redundancies, and the pledge risk is also smaller than that of Gansu Bank.
(Note: The data in this article comes from the Gansu Bank Xinpi Report, Wind, Gansu Banking and Insurance Regulatory Bureau, etc.)