The new banks are still facing the challenge of improving their asset-liability structure, boosting their profitability, and lowering their non-performing loan ratio
China Technology Investment (CTI), Ting Zhang, and Yang Yongjie
In the past two years, Bank of Sichuan (BOS), Bank of Shanxi (BS), and Liaoshen Bank (LB) have been merged and reorganized to create a new bank. (hereinafter referred to as "Bank of Shanxi") and Liaoshen Bank Co., Ltd. (hereinafter referred to as "Liaoshen Bank") have been established, and the three banks have absorbed and merged a number of city commercial banks in the province. The three banks' shareholders' background is dominated by state-owned enterprises.
Deposit and loan ratios are below average
Since 2020, there have been three new city commercial banks, all of which were merged and reorganized on the basis of the original bank. Sichuan Bank was established the earliest, which was listed on November 7, 2020, to the original Panzhihua City Commercial Bank Co. and Liangshanzhou Commercial Bank Co. based on the new merger to establish the first provincial-level city bank in Sichuan Province; April 28, 2021, the Bank of Shanxi was listed on the establishment of the bank, replacing the original Datong Bank Limited, Changzhi Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited, Jincheng Bank Limited and Jincheng Bank Limited. Bank of Shanxi was established on April 28, 2021, replacing the original Datong Bank Limited, Changzhi Bank Limited, Jincheng Bank Limited, Jinzhong Bank Limited and Yangquan City Commercial Bank Limited; on June 9 of the same year, Bank of Liaoshen was established by merging the former Yingkou Coastal Bank Limited and Bank of Liaoyang Limited. The registered capital of Bank of Sichuan, Bank of Shanxi and Bank of Liaoshen is 30 billion yuan, 23.996 billion yuan and 20 billion yuan respectively.
In terms of shareholder background, the shareholders of Bank of Sichuan are mainly a combination of state-owned and private enterprises, with state-owned capital dominating. Specifically, Sichuan Financial Holding Group Co., Ltd. holds 20%, Liangshan State Development (Holding) Group Co., Ltd. holds 15%, Chengdu Tianfu Capital Investment Co., Ltd. holds 10.26%, Sichuan Yibin Wuliangye Group Co., Ltd. holds 5.5%, and Chengdu Industrial Functional Zone Investment and Operation Group Co. In addition, Sichuan Commercial Investment Group Co., Ltd, Sichuan Renshou Sightseeing Tianfu Investment Co.
Bank of Shanxi's top five shareholders are Shanxi Rongjin Xingjin Private Investment Fund Partnership (limited partnership), Datong Economic Construction Investment Group Limited Liability Company, Zhongrong Xinda Group Limited, Shanxi Juyuan Coal Chemical Company Limited, Guangdong Aoma Electric Company Limited, the proportion of shares are 63.76%, 3.27%, 1.73%, 1.15%, 0.90%. After shareholding penetration, the largest shareholder of Bank of Shanxi is controlled by Shanxi Financial Investment Holding Group Co.
The background of the shareholders of LiaoShen Bank is mainly Shenyang SASAC, Shenyang Finance Bureau, Yingkou SASAC, Liaoyang SASAC, etc., of which Liaoning Financial Holding Group Co. holds 52.5%, Liaoning Provincial Transportation Construction Investment Group Co. holds 25%, and the Deposit Insurance Fund Management Limited Liability Company, Shenyang Shengjing Jinzhu Investment Group Co. and Shenyang Financial Center Development Group Ltd. and Shenyang Financial Center Development Group Ltd.
Currently, all three banks have released their 2021 annual reports. As of the end of 2021, the total assets of Bank of Sichuan amounted to 184.820 billion yuan, the assets of Bank of Shanxi amounted to 296.182 billion yuan, and Bank of Liaoshen amounted to 225 billion yuan. The data show that Sichuan Bank's deposit and loan balances were 132.422 billion yuan and 101.543 billion yuan respectively, with a deposit to loan ratio of 76.68%; Shanxi Bank's various loan balances were 161.4 billion yuan, and various deposit balances were 220.6 billion yuan, with a deposit to loan ratio of 73.16%; and Liaoshen Bank's deposit and loan balances were 193.6 billion yuan and 21.4 billion yuan respectively, with a deposit to loan ratio of only 11.1%.
* three banks assets, according to the bank's annual report data chart
BCI data show that as of the end of 2021, China's commercial banks deposit and loan ratio of 79.69%. ICBC Investment Banking Department Research Center report pointed out that from the point of view of commercial bank profitability, the higher the loan-to-deposit ratio means that the more its interest-earning assets, the lower the cost of liabilities, the corresponding profitability is stronger; on the contrary, it means that the bank's profitability is weaker. In terms of bank deposits and loans, the three banks' deposit-to-deposit ratios are all lower than the average commercial bank, but the profitability of Bank of Sichuan and Bank of Shanxi is slightly better.
Earnings in general loss
It is worth noting that, among the three banks, two banks net profit loss situation. As of the end of 2021, Shanxi Bank's operating income and net profit were 2.705 billion yuan and -4.673 billion yuan respectively; Liaoshen Bank's annual operating income was -474 million yuan, and its net profit was -1.19 billion yuan. As for Sichuan Bank, which was established a little earlier in 2021, its operating income was 3.51 billion yuan, an increase of 61.1% year-on-year; and its net profit was 620 million yuan, an increase of 89.97%.
*Three banks revenue and net profit, according to the bank's annual report data chart
In the view of Zhou Maohua, small and medium-sized banks in the merger and reorganization of the governance challenges, "if the small and medium-sized banks reorganization of personnel and management can not be effectively integrated, it will be difficult to achieve the optimization of the shareholding structure, to reduce the potential risks, improve operational efficiency and other objectives, just inflated scale The government has also been working on a new strategy to improve the quality of banking services, which may result in a '1+1