Salt pickers|Produced
Author |Multifaceted Finance Working Group
Since the beginning of this year, a number of small and medium-sized banks have been auctioned, and many of them have even been "sold at a discount". In October, Lanzhou Rural Commercial Bank publicly auctioned 100,000 original shares at an appraisal price of 1840,000 yuan, the starting price was only 1 yuan, and it was finally auctioned at 70,000 yuan**, which caused embarrassment in the industry.
With the passage of time, the equity of small and medium-sized banks is no longer sought after, a trend that is not good news for Zhongyuan Bank, which is known as a "regular auctioneer".
Salt pickers noted that as of December 22, 2023, on platforms such as Ali Auction, Zhongyuan Bank has a total of 3300 million yuan of equity and debt are being auctioned publicly, but no one has signed up yet.
In recent years, Zhongyuan Bank has been moving forward amid turmoil. The former executives were investigated one after another, which made the high-level personnel changes of Zhongyuan Bank extremely frequent during the year, and the performance also appeared in the situation of "increasing revenue but not increasing profits", and the net profit attributable to the parent company increased and the asset quality was under pressure.
As the only provincial commercial bank in Henan Province with outlets covering the whole area, can Zhongyuan Bank, which has high hopes, "stand out from the encirclement" under the leadership of the new senior management team?
A number of large equity auctions have been unsuccessful, and the stability of the equity structure has been questioned
For a long time, it is not uncommon for small and medium-sized banks to auction equity or creditor's rights, but it is rare for Zhongyuan Bank to be called a "frequent auctioner".
According to incomplete statistics, as of December 2023, there have been 25 auctions related to Zhongyuan Bank's equity and claims on Ali's judicial auction platform, of which only 5 have been successfulThere are also 3 ongoing auctions, including bid 3A large equity auction of 1.4 billion yuan, but no one has signed up at present, and the remaining 17 have been unsold.
And this is not the first time that Zhongyuan Bank's stock debt target has been unsold. Since the beginning of this year, Zhongyuan Bank has successfully completed 6 auction transactions, and there are 3 transactions of more than 9 million. Among them, the highest sum was 9.96 million yuan, and after 1,155 onlookers, 1 person signed up to successfully auction it. The starting price of the other three is 44860,000 yuan, 15320,000 yuan and 12850,000 yuan. "Frequent auctions and unsuccessful auctions" seem to have become a prominent feature of Zhongyuan Bank's stock and debt auctions.
In addition to the frequent number of auctions, the amount of auctions by Zhongyuan Bank has also been relatively large in recent years. One of the equity targets currently being auctioned has a valuation of 4014.6 billion yuan of equity, the current bid is 3$1.4 billion.
According to incomplete statistics, since January 3 this year, the bank has participated in at least 20 large equity auctions. In addition, at the end of December and the beginning of January 2024, the bank still has a number of equity claims waiting to be auctioned, from 100,000 to 1624.8 billion.
Screenshot of part of Ali's auction platform.
Extending the timeline to three years, Zhongyuan Bank also has a number of equity auction information, but most of them have been unsuccessful. Among them, the highest one is the auction of 500 million shares that ended on December 31, 2021, reaching 65.2 billion yuan. Among them, there are also auction targets of tens of millions of yuan or even more than 100 million yuan, and no one has registered.
Part of the information on the past stock and debt auctions of Zhongyuan Bank.
The frequent auction of equity may affect the stability of Zhongyuan Bank's equity structure to a certain extent. According to the semi-annual report information, as of June 30, 2023, Zhongyuan Bank had a total of 683.2 billion domestic shares were pledged, accounting for 18 percent of the total number of issued ordinary shares69%。In addition, there are 27 cases involving the judicial freezing of domestic shares6.4 billion shares, representing 756%。
The pledge and freezing of a large amount of Zhongyuan Bank's shares, as well as the fact that its shareholders have been included in the list of judgment defaulters several times, will indeed have a certain impact on the stability of Zhongyuan Bank's own equity structure. Bai Wenxi, chairman of the China Enterprise Capital Alliance, believes that a large amount of equity is pledged and frozen, which means that these shares cannot be circulated in the market, which will naturally have an impact on the bank's equity structure and liquidity. If these stakes are auctioned, it will inevitably have a greater impact on the bank's shareholding structure.
Reduced to a "penny stock", both performance and asset quality are under pressure
Why has Zhongyuan Bank auctioned its equity for many years?
According to public information, Zhongyuan Bank was officially established on December 23, 2014, and it is also the only provincial commercial bank in Henan Province with outlets covering the whole area. In July 2017, Zhongyuan Bank was listed on the main board of the Hong Kong Stock Exchange. In May 2022, with the approval of the China Banking and Insurance Regulatory Commission, it absorbed and merged Luoyang Bank, Pingdingshan Bank and Jiaozuo China Travel Bank to become the first city commercial bank in Henan to exceed one trillion yuan.
However, the development of Zhongyuan Bank, which has high hopes, has not been very good in recent years, and its stock price has fallen all the way to "penny stocks". It is reported that the issue price of Zhongyuan Bank in 2017 was 2HK$45, which began to *** after listing and fell below HK$1 at the end of 2021, and now the stock price has been as low as 0HK$34 shares, less than a fraction of the issue price.
In addition to the "outrageous" low stock price, Zhongyuan Bank's performance development in recent years has also been unsatisfactory.
According to the 2023 semi-annual report, the total assets of Zhongyuan Bank during the period were 13,6249.6 billion yuan, an increase of 27%；The total amount of loans is 7235900 million yuan, an increase of 5 from the end of the previous year8%；The balance of the deposit is 87691.2 billion yuan, an increase of 6% over the end of the previous year. Achieved revenue of 135 in half a year5.1 billion yuan, a year-on-year increase of 302%；Achieved a net profit of 206.2 billion yuan, down 3 percent year-on-year6%；At the same time, the net profit attributable to the parent company was 200.2 billion yuan, a year-on-year decrease of 44%, there is a situation of "increasing income but not increasing profits".
In terms of longitudinal comparison, in the past five years, the net profit attributable to shareholders of Zhongyuan Bank increased year-on-year respectively. 39%, except for a large increase in 19 years, the overall growth showed a leading trend.
At the same time, Zhongyuan Bank's revenue growth was not stable. From 2018 to 2021, the bank's revenue growth rate was as follows: 13%、-0.75%, all the way down until 2022, the revenue growth reached 3282%。
Cartographic Salt Pickers Multifaceted Financial Working Group.
On August 18, 2023, the State Administration of Financial Supervision and Administration released the main regulatory indicators of commercial banks in 2023, which showed that the proportion of non-interest income of commercial banks in the first half of this year was 21 on average8%。In the first half of this year, Zhongyuan Bank's non-interest net income accounted for 19 percent of its operating income62%, which is lower than the industry average.
In this regard, Shen Meng, director of Xiangsong Capital, pointed out that the relatively low proportion of non-interest income indicates that banks are more dependent on traditional interest income, and their ability to innovate business is limited.
In addition, the salt pickers also noticed that in recent years, Zhongyuan Bank's risk data performance and asset quality have also declined.
In the first half of this year, the average non-performing loan ratio of commercial banks as a whole was 162% with an average provision coverage ratio of 20613%。During the same period, the provision coverage ratio of Zhongyuan Bank was only 15051%, down 657%；The balance of non-performing loans was 1587.1 billion yuan, an increase of 26 from the end of the previous year7.2 billion yuan;The non-performing loan ratio also increased by 026% reached 219%。
In contrast, in the past five years, Zhongyuan Bank's non-performing loan ratio has fluctuated around 2%, and the highest was 2 in 201844%, down to a minimum of 1 in 202193%。According to relevant statistics, the average level of commercial banks from 2018 to 2022 is: 63%。It is not difficult to find that Zhongyuan Bank's non-performing loan ratio is above the average. In Shen Meng's view, the rise in the non-performing rate also shows that Zhongyuan Bank has greater operating pressure within its business scope.
A number of senior executives were "dismissed", and internal control management was tortured
Towards the end of the year, the management team of Zhongyuan Bank has finally "settled". Guo Hao, Liu Kai and Pan Wenyao were elected as the new chairman, president and secretary of the board of directors respectively.
In the past two years, the management team of Zhongyuan Bank has been in turmoil. According to the company's information, there have been six changes in the bank's senior management this year alone. In April 2023, Xu Nuojin, who had served for less than two years, resigned as chairman and other positions due to work transfer, and Guo Hao officially took over as chairman two months later. On June 25, Li Weizhen, Li Wanbin and others resigned from the senior management of Zhongyuan Bank, and it has only been more than a year since they took office.
On October 8, Wang Jiong, vice chairman of Zhongyuan Bank, resigned. It is understood that Wang Jiong's vice chairman qualification was officially approved in January this year, and it was only 9 months before his resignation.
In addition to the normal changes due to job transfers and other reasons, there are also many senior executives of Zhongyuan Bank who have been "dismissed" due to violations of laws and disciplines in recent years. In November 2021, before Xu Nuojin was airborne, Dou Rongxing, the "soul figure" of Zhongyuan Bank, announced that he would resign from relevant positions due to work adjustments, but soon after the news came out that he was investigated in accordance with the law. In June 2022, Dou Rongxing was "double-opened" for serious violations of duty and suspected of ** crimes and illegal loan issuance.
In addition to Dou Rongxing, Zhao Weihua, former vice president of Zhongyuan Bank, and Wei Jie, vice chairman of Zhongyuan Bank, were also investigated on suspicion of serious violations of discipline. In February 2023, Jia Jihong, the former deputy chairman of the board of supervisors of Zhongyuan Bank, was also investigated on suspicion of serious violations of discipline and law.
In this regard, some analysts pointed out that in recent years, there have been frequent changes in the senior management of Zhongyuan Bank, and a number of key executives have been investigated one after another, which to a certain extent reflects that the internal control problems of Zhongyuan Bank can no longer be ignored.
According to incomplete statistics, in 2023, Zhongyuan Bank has received 27 fines for internal control management and financial violations, involving issues such as daily operations, senior management appointments, credit business, information reporting, and anti-money laundering.
On March 28, 2023, the Anyang Tieyi Road Branch of Zhongyuan Bank was fined 2.15 million yuan by the former Anyang Banking and Insurance Regulatory Bureau for failing to carry out the "three checks" on loans and actually performing the duties of senior executives without qualification approval.
Casting and melting cold financial technology into a financial experience full of temperature, and constantly exploring the 'poetry and distance' of financial digital intelligence. Liu Kai, then Secretary of the Party Committee and President of Zhongyuan Bank, said in the president's speech in the 2022 annual report.
However, now that the equity stability of Zhongyuan Bank has been questioned, and the asset quality, capital performance and internal control management need to be improved, can the new leadership team headed by Guo Hao lead Zhongyuan Bank to find "poetry and distance"?