China Fund News reporter Wu Jun
Two more banks were approved for dissolution.
Nearly three months after the disclosure of the absorption and merger information, on September 14, the website of the Guangdong Financial Supervision Bureau disclosed two administrative license approvals, agreeing that Dongguan Dalang Dongying Village Bank and Huizhou Zhongkai Dongying Village Bank would be dissolved due to the absorption and merger of Dongguan Rural Commercial Bank. At the same time, the website of Dongguan Rural Commercial Bank issued an announcement on the system switch and business changes of the two village and township banks. The regulator agreed to the dissolution of the two village and township banks and was absorbed and merged by Dongguan Rural Commercial Bank
On September 14, the Guangdong Financial Regulatory Bureau issued two administrative license approvals, involving the dissolution of Huizhou Zhongkai Dongying Village Bank and Dongguan Dalang Dongying Village Bank.
According to the approval document, in view of the absorption and merger of Huizhou Zhongkai Dongying Village Bank by Dongguan Rural Commercial Bank, the Guangdong Financial Regulatory Bureau agreed to the dissolution of the bank, and required it to handle the dissolution of relevant matters in strict accordance with the requirements of relevant laws and regulations, and immediately stop all business activities from the date of receipt of the reply, and the shareholders' meeting, the board of directors, the board of supervisors and the senior management immediately stop exercising their powers, return the financial license to the Huizhou Financial Supervision Bureau, make a dissolution announcement to the outside world, and handle the cancellation of registration in accordance with the law.
At the same time, the Guangdong Financial Supervision Bureau also agreed to the dissolution of Dongguan Dalang Dongying Village Bank, and required it to handle the dissolution of relevant matters in strict accordance with the requirements of relevant laws and regulations, and immediately stop all business activities from the date of receipt of the reply, and the shareholders' meeting, the board of directors, the board of supervisors and the senior management immediately stop exercising their powers, return the financial license to the Dongguan Financial Supervision Bureau, make a dissolution announcement to the outside world, and handle the cancellation of registration in accordance with the law.
Also on September 14, Dongguan Rural Commercial Bank announced on its official website that in order to further integrate the group's operating resources and better provide financial services to customers, Dongguan Rural Commercial Bank absorbed and merged Huizhou Zhongkai Dongying Village Bank and Dongguan Dalang Dongying Village Bank with regulatory approval. In order to successfully complete the merger, the two rural banks will switch their systems from 17:00 on September 14, 2024 to 09:00 on September 18, 2024, and the credit data of the two rural banks will be migrated from September 14 to September 17.
On June 20 this year, the regulatory website disclosed two pieces of information, Dongguan Rural Commercial Bank was approved to absorb and merge Huizhou Zhongkai Dongying Village Bank and Dongguan Dalang Dongying Village Bank, and undertake their claims and debts after clearing assets and verifying capital. It is understood that Huizhou Zhongkai Dongying Village Bank will be rebuilt into Huizhou Branch of Dongguan Rural Commercial Bank, which is a rare case in China in which a rural commercial bank absorbs and merges a village bank and rebuilds it into a branch.
According to public information, Huizhou Zhongkai Dongying Village Bank, which was dissolved this time, was established in December 2010 and is the first village bank in Huizhou City, and it is also a joint-stock commercial bank with independent legal personality led and controlled by Dongguan Rural Commercial Bank, with a registered capital of 300 million yuan.
Dongguan Dalang Dongying Village Bank was established in June 2012 and was also initiated by Dongguan Rural Commercial Bank with a registered capital of 100 million yuan. In 2023, the bank will achieve an operating income of 25.529 million yuan and a net profit of -2.1487 million yuan.
Dongguan Rural Commercial Bank, which absorbed and merged the two banks, was listed on the Hong Kong Stock Exchange in September 2021, becoming the 13th listed rural commercial bank and the fourth H-share listed rural commercial bank in China.
According to the latest interim data disclosed by Dongguan Rural Commercial Bank, in the first half of this year, the bank achieved operating income of 6.4 billion yuan and net profit of 3.38 billion yuan, a year-on-year decrease of 11.9% and 8.1% respectively. As of the end of June 2024, the bank's assets were nearly 738 billion yuan, an increase of 4.1% from the beginning of the year, and the proportion of loans in total assets rose to 51.5%. At the end of June, the bank's non-performing loan ratio was 1.59%, the capital adequacy ratio was 16.02%, and the provision coverage ratio was 224.01%. What are the reasons behind the dissolution of a large number of small and medium-sized banks this year? According to incomplete statistics, more than 50 small and medium-sized banks or rural credit cooperatives have been dissolved since the beginning of this year. For example, on September 6, the Yunnan Financial Supervision Bureau agreed to the dissolution of Qujing Fuyuan Fudian Village Bank due to its absorption and merger by Fudian Bank, and all of the bank's business, property, creditor's rights and debts, as well as other rights and obligations, were inherited by Fudian Bank in accordance with the law. On September 5, the Xinjiang Financial Supervision Bureau agreed to the dissolution of four rural credit cooperatives, including the Artush Rural Credit Cooperative and the Aktao County Rural Credit Cooperative, as a result of the merger, and all business, property, creditor's rights and debts, as well as other rights and obligations, were inherited by the newly established Xinjiang Kezhou Rural Commercial Bank.
On June 28, the Zhejiang Financial Supervision Bureau issued an approval on the dissolution of Zhejiang Zhoushan Putuo Chouzhou Village Bank Co., Ltd.
What are the reasons behind the absorption, merger and dissolution of many small and medium-sized banks? Liu Chengxiang, chief analyst of the banking industry of Kaiyuan Securities, believes that the wave of mergers and reorganizations of banks is not only due to their own business reasons, but also from the requirements of regional insurance. Small and medium-sized banks are facing difficulties such as insufficient profits, weak asset quality, and limited capital replenishment, and the regulator has encouraged their mergers and restructurings. In addition, even if the banks themselves do not have major operational problems, small and medium-sized banks may be merged for the sake of regional financial reform and the formation of financial synergies.
In August this year, Xiao Yuanqi, deputy director of the State Administration of Financial Regulation, pointed out at a press conference that when talking about the reform of small and medium-sized financial institutions, it is necessary to adopt the principle of seeking truth from facts and steadily advancing the reform, and not to engage in "one size fits all". Adhere to the principle of "one province and one policy, one line and one policy, and one department and one policy".
On the question of whether the integration of regional banks will be accelerated in the future, he stressed that it is necessary to optimize the regional financial layout according to factors such as the scale of regional economic development, the total amount and development trend of finance, and the changes in financial demand, and there is no problem of fast and slow. The fundamental goal is that financial supply and financial services should be able to meet the multi-level and diversified financial needs of market entities and financial consumers.
Editor: Xiao Mo
Review: Xu Wen