The market was quite surprised. This year, the first A-share bank to attend the “halberd” issuance and examination meeting.
On April 14, according to the information on the official website of the CSRC, at the 43rd meeting of the 18th issuance Review Committee in 2022 held that day, Jiangsu Dafeng rural commercial bank failed to pass the initial public offering, and the bank also became the first bank in the history of A-Shares that failed to pass the initial public offering application
“The relevant departments did not say the reasons for the failure, and the details shall be subject to the announcement.” On April 15, Dafeng rural commercial bank said in an interview with 21st Century Business Herald. For the follow-up listing plan, it said that “it is not convenient to say for the time being.”
According to public data, Dafeng rural commercial bank is a district level rural commercial bank in Dafeng District, Yancheng City, Jiangsu Province. It was established in November 2011. Its predecessor was the rural credit cooperative more than 60 years ago. It established the rural cooperative bank in 2005 and restructured the rural commercial bank in 2011.
It should be noted that before the meeting, Dafeng rural commercial bank had been waiting for A-Shares for more than four years.
As early as November 2017, the bank officially submitted IPO application materials to the CSRC and was accepted; In March 2018, the CSRC gave feedback on the bank’s application materials, pointing out normative issues such as equity transfer and shareholder pledge; After that, the bank’s pre disclosure update stayed in May 2018 until it was blocked out of the capital market by the development and Examination Commission.
for the IPO of Dafeng rural commercial bank, many insiders said in an interview with reporters that they were quite surprised, because before that, the banks at the A-share meeting had not yet “failed”, and Dafeng rural commercial bank unfortunately “set a record”
It is worth mentioning that in July 2018, whether the application for fixed increase of Bank Of Nanjing Co.Ltd(601009) 14 billion yuan was also quite surprised the market, which has also become the only case that A-share banks have been rejected by regulators since 2000.
Combined with whether the IPO of Dafeng rural commercial bank was approved or not, the “practice” of IPO and refinancing applications of bank financial institutions has been broken one by one.
“at present, strong financial supervision has become the norm. Whether the IPO of Dafeng rural commercial bank is approved or not indicates that the supervision is relatively strict on the listing of financial institutions, and also reflects the strict supervision on the threshold of capital market access”, Dong ximiao, chief researcher of Zhaolian finance, told reporters
Li Guangzi, director of the banking research office of the Institute of finance of the Chinese Academy of Social Sciences, further analyzed to reporters that the attention of the regulatory authorities mainly focused on the competitiveness of Dafeng rural commercial bank, asset quality and the relationship with the provincial Associated Press, which reflected the regulatory authorities’ concerns about the future development prospects of the bank, and to some extent showed that the regulatory authorities had tightened the listing of small and medium-sized rural commercial banks.
From the questions released by the development and Examination Commission, the supervision focuses on the competitiveness and profitability, asset quality and anti risk ability of Dafeng rural commercial bank as a regional rural commercial bank, as well as the relationship with Jiangsu associated press.
According to the latest annual report, by the end of 2021, the total assets of Dafeng rural commercial bank were 53.975 billion yuan, including 44.435 billion yuan of deposits, a year-on-year increase of 4.47%; Loans and advances were 34.451 billion yuan, an increase of 11.27% year-on-year.
During the reporting period, the bank achieved an operating revenue of 1.333 billion yuan, a year-on-year increase of 5.87%; The net profit was 573 million yuan, a year-on-year increase of 12.33%. It can be seen that there is an obvious gap between the bank and the listed rural commercial banks in terms of asset scale, revenue and profit.
In terms of asset quality, by the end of 2021, the non-performing loan ratio of Dafeng rural commercial bank was 1.07%, a decrease of 0.03 percentage points over the beginning of the year, and the provision coverage rate was 331.40%, an increase of 5.93 percentage points over the beginning of the year.
However, in the same period, the bank’s capital adequacy ratio declined, from 15.08% to 14.75%, the Tier-1 capital adequacy ratio fell from 13.94% to 13.60%, and the core Tier-1 capital adequacy ratio fell from 13.94% to 13.60%.
however, some people close to the supervision pointed out that the key issue of whether the IPO of Dafeng rural commercial bank was approved was not the performance of the bank, but the effectiveness and independence of its internal control
In the inquiry, the development and Examination Commission pointed out that the core system of Dafeng rural commercial bank is developed, constructed and operated by Jiangsu Provincial Association, and asked the bank to explain whether the Provincial Association’s responsibilities and management of its board members, senior management appointment, daily supervision, operation management, risk management, development and construction of important information systems and operation and maintenance management affect the independence of the issuer and the fairness of information disclosure.
In Dong ximiao’s opinion, the issues concerned by the development and Examination Commission belong to normal inquiries, but if questions the independence and effectiveness of internal control of Dafeng rural commercial bank due to the relationship between Dafeng rural commercial bank and Jiangsu Associated Press, it will inevitably be controversial to veto the IPO of the bank
In this regard, Wang Jianhui, a senior researcher in the industry, pointed out that from the questions asked by the development and Examination Commission, it can basically be improved without too many structural injuries. If Dafeng rural commercial bank makes corresponding feedback, it can smoothly promote the listing.
The reporter noted that up to now, there are 10 banks waiting in the A-share queue, all in the pre disclosure update state. Including Jiangsu Hai’an rural commercial bank, Jiangsu Kunshan rural commercial bank, Bozhou Yaodu rural commercial bank, Anhui Ma’anshan rural commercial bank, Guangdong Nanhai rural commercial bank and Guangdong Shunde rural commercial bank.
Li Guangzi told reporters that for those rural commercial banks with listing plans, improving bank operation efficiency, improving asset quality, optimizing internal corporate governance and consolidating the development foundation are the most important.
