On the Internet auction platform, there are many small and medium-sized banks, including urban commercial banks and rural commercial banks. Recently, a number of banks have joined the team of equity auction.
According to Alibaba auction network, 180 million domestic shares of Zhongyuan bank will be sold off on February 14; The auction of 108 million shares of Bank of Ningxia will start on February 21, accounting for about 4.98% of its total equity. If the auction is successful, Bank of Ningxia may usher in a new major shareholder; At the same time, nearly 20 million shares of Bank of Wenzhou were auctioned.
The auction of bank equity is usually related to the judicial disputes involving bank shareholders, which also reflects the risk of bank equity pledge. For banks, the impact of equity auction mainly depends on the auction scale. If the changes of the first few major shareholders are involved, it will undoubtedly affect the operation and management of banks.
However, in the current bank equity auction market, it is worth noting that the flow auction has become an obvious phenomenon. Insiders interviewed by China business said that the “cold” equity of small and medium-sized banks reflected the reduction of their investment value, which was behind the market’s expectation of the increase in uncertainty in the development of small and medium-sized banks. The consensus in the industry is that with the intensification of the differentiation of the banking industry, some small and medium-sized banks with weak strength will be more and more sad.
equity of several banks was auctioned
For Zhongyuan bank, this is not its first equity auction. Since December last year, Alibaba auction online has put on shelves a number of equity of Zhongyuan bank to be auctioned, of which the highest auction equity amount to 500 million shares. However, the latest information on the platform shows that the auction has been sold.
Now, another 180 million domestic shares of Zhongyuan bank will be “sold off”. According to the judicial auction procedure, after the two auctions, the third one will be sold, which means that in the first two auctions, no one cares about this part of the equity of Zhongyuan bank.
The 180 million domestic shares of Zhongyuan bank are mainly divided into four parts for sale. The sale shares are 50 million shares, 50 million shares, 40 million shares and 40 million shares respectively. The sale price is 20% lower than the evaluation price. According to this calculation, the price per share is about 0.73 yuan, which is lower than the latest closing price of Zhongyuan bank by HK $0.83/share.
In an interview with reporters, a senior industry practitioner said that in terms of price, it is unlikely that this part of the equity of Zhongyuan bank will be traded. After all, the auction price is higher than the price of the secondary market unless investors are willing to buy at a premium.
The reporter found that on the auction platform, the 27.11 million domestic shares of Zhongyuan Bank held by Zhumadian Nanfang iron and Steel Co., Ltd. are being sold. The current price is 22.5373 million yuan, and the price per share is about 0.83 yuan. The platform showed that there were 7087 onlookers on the sale, and 23 people set up reminders, but no one signed up. By analogy, the situation of selling 800 million domestic shares of Zhongyuan bank is not optimistic.
In addition to Zhongyuan bank, the equity auction of Bank of Ningxia has also attracted much attention. It is reported that the starting price of the company’s appraisal is {000060 million, which is equivalent to {000060 million} from the new auction price of {000036 million}.
According to public information, Bank of Ningxia was established in October 1998. It is a joint-stock commercial bank established by the governments and enterprises of Ningxia Hui Autonomous Region and Yinchuan city.
In addition, in terms of shareholder composition, the top six shareholders of the bank are: Department of finance of Ningxia Hui Autonomous Region, with a shareholding ratio of 26.32%; New China Union Holdings Ltd(000036) , with a shareholding ratio of 12.47%; Ningxia Xingjun Industrial Group Co., Ltd., with a shareholding ratio of 5.68%; Zhejiang Hailiang Co.Ltd(002203) , with a shareholding ratio of 5.63%; Ningxia Electric Power Investment Group Co., Ltd., with a shareholding ratio of 5.19%; Western (Yinchuan) Financing Guarantee Co., Ltd., with a shareholding ratio of 4.63%.
According to the total share capital of 2.168 billion shares of Bank of Ningxia, the number of shares to be publicly auctioned accounts for about 4.98% of the equity of Bank of Ningxia. If the bid is successfully auctioned, Bank of Ningxia may usher in a new sixth largest shareholder. At present, the auction platform shows that as of February 13, the auction had 1078 onlookers, 22 people set reminders, and no one signed up.
In addition, the real estate group and a bank in Wenzhou will hold 1500 shares on February; The 4.76 million shares of the bank held by Zhejiang Muzi Trading Co., Ltd. will be auctioned on March 10.
Not only that, but also the equity of Quanzhou rural commercial bank, Harbin rural commercial bank, Qujing commercial bank and other banks will be intensively auctioned.
For example, according to tianyancha, up to now, Bank of Ningxia has 25 effective equity pledge information, and the cumulative amount of pledged equity is about 686 million shares, accounting for about 31.64% of the total share capital of Bank of Ningxia. The information on equity freeze involves 23 articles, with a total of about 472 million shares frozen.
Senior practitioners in the above industries told reporters that the high proportion of bank equity pledge will make the bank’s operation and management unstable, and if some shareholders default on the loans obtained through equity pledge, it will also affect the bank; In addition, if there is a judicial freeze due to shareholders’ business risks, banks will be under pressure from supervision.
In October 2021, the China Banking and Insurance Regulatory Commission issued the measures for the supervision of the behavior of major shareholders of banking and insurance institutions (for Trial Implementation), which made it clear that major shareholders whose equity pledge ratio exceeded 50% shall not exercise their voting rights, and bancassurance institutions are prohibited from purchasing non-public bonds issued by major shareholders or providing guarantees for them, directly or indirectly cross holding shares with major shareholders, etc.
streaming phenomenon is more and more obvious
In the current bank equity auction market, streaming auction has become an obvious phenomenon. According to the statistics of the auction platform, since February, a total of 92 bank shares have been auctioned, of which nearly 60% have been auctioned, which to some extent reflects the decline in the popularity of small and medium-sized banks by investors.
China Everbright Bank Company Limited Co.Ltd(601818) financial market analyst Zhou Maohua once told the first financial reporter that there are three main reasons for the lack of auction in the bank’s equity auction, of which the most important is related to the bank’s own operating conditions and prospects.
At present, affected by the economic cycle, external impact and intensified market competition, the operation pressure of small and medium-sized banks is large, and some small and medium-sized banks have problems of low asset quality and operation level.
Senior practitioners in the aforementioned industries also said that from the perspective of risk return, the investment value of small and medium-sized banks is declining. On the one hand, the return on capital of small and medium-sized banks is not as good as before; On the other hand, the quality of credit assets of small and medium-sized banks has declined and there is a lack of high-quality assets.
Luo Zhenxin, a postdoctoral fellow in finance at Peking University, also wrote that since 2011, the return on capital of the banking industry has shown a downward trend for eight consecutive years. The return on capital in 2019 was 10.96%, only about half of the peak of 20.40% in 2011. Compared with large commercial banks, the return on capital of small and medium-sized banks as a whole has fallen more sharply, and the income from holding bank equity has declined sharply.
Secondly, Zhou Maohua also analyzed that the large auction amount of some small and medium-sized banks and the high requirements of regulators for bank shareholders have also narrowed the scope of equity investors of small and medium-sized banks to a certain extent; At the same time, the complex internal governance and ownership structure of small and medium-sized banks also make investors cautious, such as the high proportion of equity pledge of some small and medium-sized banks.
“In addition, in recent years, the regulatory authorities have strengthened the governance of small and medium-sized banks, promoted their high-quality development, guided small and medium-sized banks to consolidate capital, operate steadily and pay attention to asset quality, which also has a certain impact on the equity transfer of small and medium-sized banks.” Zhou Maohua said.
In the current economic cycle and industry trend, with the intensification of banking differentiation, the consensus in the industry is that if the weak small and medium-sized banks can not find the growth power in time, the life will be more and more sad and uncertain. This uncertainty will also affect the market’s judgment on the equity value of banks, and does not rule out the possibility that some small and medium-sized banks may be merged and liquidated.
