Recently, China's financial sector has set off a wave of bank reshuffle, with five banks dissolved in two consecutive months, and the banking industry is facing profound adjustment and reshaping. Among them, Gaocheng Hengsheng Rural Bank and Jinzhou Hengsheng Rural Bank, which are branches of Ouhai Rural Commercial Bank, have become the focus, and this merger is seen as a typical case of the main initiating bank integrating its banks. According to the announcement issued by the Hebei Supervision Bureau of the State Administration of Financial Supervision and Administration, the dissolution of the two banks was caused by the merger by absorption, and the merger was Shijiazhuang Xinhua Hengsheng Village Bank. After the dissolution, all business, property, creditor's rights, debts and other rights and obligations will be inherited by the acquirer. The dissolution triggered by this merger not only had a profound impact on the banks themselves, but also brought an unprecedented impact on the financial markets.
The recent wave of bank dismantling has attracted a lot of attention, but it is not an isolated phenomenon. In the second half of this year, more than 10 banks have been dissolved, a significant increase compared to the first half of the year. This series of dissolutions is part of the structural reform of China's financial institutions, and small and medium-sized banks, especially village and township banks, are facing greater pressure and difficulties. At the policy level, it is also clear that it is necessary to promote the reform of small and medium-sized financial institutions and respond to the risks of small and medium-sized banks in a timely manner.
There are many reasons for this wave of bank dissolution, one of which is the multiple problems faced by small and medium-sized banks, especially village and township banks. First of all, equity confusion is a common problem, and some banks' major shareholders hold too large shares, resulting in decision-making and operational difficulties. Second, due to the sluggish economic development, small and medium-sized banks lack an advantage in competition and find it difficult to compete with large banks. There are also some banks that have problems of non-standard management and operation, high loan risk, low asset quality, and face greater risks.
In the face of these problems, a series of policy responses and reform measures have been adopted. First, banks with better ratings are encouraged to absorb and merge high-risk village and township banks to mitigate financial risks. This kind of merger and reorganization will help solve the problems existing in small and medium-sized banks, and through the concentration of resources, financial risks can be better resolved. Secondly, banks are required to increase their support for the real economy and promote financial institutions to better serve the real economy. In addition, policies and support will be provided to promote the reform of small and medium-sized financial institutions.
The wave of bank merger reform has been blowing, and small and medium-sized banks will usher in greater changes. This round of reform is expected to promote financial institutions to better serve the real economy and inject new vitality into the healthy development of the financial system. With the advancement of this reform, we expect the financial sector to achieve a more stable and sustainable development in an all-round way.
Recently, there have been a series of bank dissolutions in China's financial sector, among which the dissolution of Gaocheng Hengsheng Village Bank and Jinju Hengsheng Village Bank has become the focus. There are many reasons for this round of dissolution, and small and medium-sized banks are facing problems such as equity confusion, lack of development, and non-standard management. In order to mitigate financial risks, it has promoted the reform of bank mergers and increased support for the real economy. With the advancement of this reform, we expect the financial industry to usher in an all-round improvement and inject new vitality into the real economy.