With the deepening of financial reform, Zhejiang Province took the lead in disclosing that the reform of the provincial associated press will adopt the United Bank model, which triggered the discussion of the rural credit system.
On January 24, the Financial Bureau of Zhejiang Province issued the implementation plan for the development of Qiantang River financial harbor (2021-2025), which ranked the first in the list of major reforms to deepen the pilot reform of rural credit cooperatives, and promoted the restructuring of the Provincial Rural Credit Union into Zhejiang rural commercial United Bank, becoming a local banking financial institution with the qualification of independent enterprise legal person.
With the orderly progress of the reform of the provincial Associated Press, under the general direction of “one province, one policy” and not “one size fits all”, the choice of the reform mode of the provincial associated press has always been the focus of attention.
As early as the second half of 2021, a number of people from the rural credit system and experts concerned about the development of rural credit have told the reporter of China Business Daily that “it is highly possible for Zhejiang Rural Credit Union to adopt the United Bank model.” After the “official announcement” announced the news, the industry paid more attention to the future investment plan and control rights of shareholders of Zhejiang Rural Credit Union.
hot discussion on the ownership of control
According to the previous multi-party discussion information, the “union bank” model is a local banking financial institution with independent enterprise legal personality, which is composed of the shares of the Provincial Rural Credit Corporation. It is the Union Bank and management service bank of the legal institution, and the legal institution is the member bank of the bank. The shares of “United Bank” are fully subscribed by each member bank, which can keep the shareholding ratio of the member bank to the original Provincial Association unchanged; A member bank shall enjoy the right of return on assets with its shares and bear the liability to the extent of its shares.
At the same time, the United Bank model mainly presents the characteristics of “maintaining the overall stability of the legal person status and quantity in the county”, “holding a limited financial license, being able to engage in wholesale deposit and loan business, and providing settlement and clearing, capital wholesale and public goods services for grass-roots legal person banks and cooperatives”, “undertaking the management, service and other functions of the original Provincial Association”. Under the condition of maintaining the independent legal person status of county-level rural commercial bank, United Bank holds limited financial licenses, such as financial management subsidiaries and financial technology subsidiaries, which avoids the requirements of high threshold of financial licenses.
However, at present, there has not been a final conclusion on how to solve the mismatch of control rights of shareholders and banks under the United Bank model.
According to the introduction information on the official website of Zhejiang Rural Credit Union, “the Provincial Rural Credit Union has 15 departments and offices at the same level, and the provincial Commission for Discipline Inspection and supervision of the Provincial Rural Credit Union has dispatched the discipline inspection and supervision team of the Provincial Rural Credit Union. It has offices in 11 cities in the province and governs 82 county (city, district) banks, including 81 rural commercial banks and 1 Rural Credit Union, with more than 50000 employees”.
The reporter noted that the shareholders of Zhejiang Rural Credit Union were shown as “81 associations such as Hangzhou Urban Rural Credit Union”, but the specific shareholding of 81 shareholders was not announced. In addition, on January 12, 2022, Zhejiang Rural Credit Union recorded the information of investors (shareholders) in the change of industrial and commercial information, and the capital contribution and shareholding ratio of 45 rural commercial banks in Zhejiang province changed, but the specific capital contribution and shareholding ratio have not been publicized at present.
A person from a rural commercial bank told reporters that it has long been possible for Zhejiang provincial associated press to choose the United Bank model. Due to the shareholding ratio of provincial commercial banks under the model, the amount of capital contribution is the key point of weighing. At the same time, the other party also said that the provincial associated press that chose the United Bank Model in the future concealed the proportion of shareholders.
The reporter noted that among the 81 rural commercial banks in Zhejiang Province, there are 6 rural commercial banks with total assets of more than 100 billion yuan, of which Hangzhou United Rural Commercial Bank Co., Ltd. ranks first in terms of operating income and total assets. By the end of 2020, its total assets were 302.839 billion yuan and its operating revenue was 8.016 billion yuan. In addition, seven rural commercial banks in Zhejiang Province announced total assets of less than 10 billion yuan in 2020.
A person from a rural commercial firm said, “If the 81 rural commercial banks of Zhejiang rural credit will be the shareholders of the United Bank in the future, how will the investment standard be formulated? Will each shareholder contribute equally or according to the proportion of asset scale? If the investment proportion remains the same as that of the original provincial Associated Press, how can the problem of control mismatch be solved? Will they also be carried out in terms of voice, control, responsibility division and risk bearing in the future? If the capital contribution is made in proportion to the scale of assets, the scale of small-scale banks and large-scale banks is quite different. How to ensure the rights and interests of small-scale banks in the future? “
reform of provincial associated press into key words in 2022
Yang Changhan, a professor, doctoral supervisor and researcher of the banking research center of the Central University of Finance and economics, told reporters that Zhejiang got the “first order” of deepening the reform of provincial rural credit cooperatives, which only opened the prelude to the deepening reform of provincial rural credit cooperatives. Following the principle of “one province, one policy”, more provincial rural credit cooperatives will participate in the sequence of deepening reform.
In the process of deepening reform, it is an important direction for provincial rural credit cooperatives to establish joint-stock rural commercial banks and even go public. In the deepening reform of rural credit cooperatives at the provincial level, such as Beijing Rural Commercial Bank, Shanghai Rural Commercial Bank and Chongqing rural commercial bank, joint-stock rural commercial banks have been established, which have operated for a long time and achieved obvious demonstration effect of restructuring and reform.
Yang Changhan believes that a desirable and mature way to deepen the reform of rural credit cooperatives is to reform the joint-stock system and go public. At present, Chongqing Rural Commercial Bank ( Chongqing Rural Commercial Bank Co.Ltd(601077) , 601077. SH), Jiangyin Rural Commercial Bank ( Jiangsu Jiangyin Rural Commercial Bank Co.Ltd(002807) , 002807. SZ), Wuxi Rural Commercial Bank ( Wuxi Rural Commercial Bank Co.Ltd(600908) , 600908. SH), Changshu Rural Commercial Bank ( Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , 601128. SH), Suzhou Rural Commercial Bank ( Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , 603323. SH), Zhangjiagang Rural Commercial Bank ( Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , 002839. SZ), Jiutai Rural Commercial Bank (6122. HK), Guangzhou Rural Commercial Bank (1551. HK) Jiangsu Zijin Rural Commercial Bank ( Jiangsu Zijin Rural Commercial Bank Co.Ltd(601860) , 601860. SH), Qingdao rural commercial bank ( Qingdao Rural Commercial Bank Corporation(002958) , 002958. SZ), Shaoxing Ruifeng Rural Commercial Bank ( Zhejiang Shaoxing Ruifeng Rural Commercial Bank Co.Ltd(601528) , 601528. SH) and Shanghai Rural Commercial Bank ( Shanghai Rural Commercial Bank Co.Ltd(601825) , 601825. SH) have all been listed in China. Among them, Chongqing rural commercial bank has successfully listed in the mainland and Hong Kong, and Jiutai rural commercial bank, Guangzhou rural commercial bank and Dongguan Rural Commercial Bank have been listed in H shares. Many rural credit cooperatives have completed the restructuring of joint-stock banks and are committed to applying for stock listing.
The joint-stock reform and even listing of the provincial rural credit cooperatives can transform the provincial rural credit cooperatives into a real banking and financial enterprise with clear property rights and standardized management, build a modern governance structure with clear rights and responsibilities of the shareholders’ meeting, the board of directors, the board of supervisors and the management, cooperate and check each other, supplement the core capital and improve the capital adequacy ratio, Optimize the capital structure and improve the capital strength, expand the asset liability business on the basis of sufficient capital and modern governance management, improve the asset quality and profitability, and enhance the ability of risk management. Then, through the modernization of provincial rural commercial banks, we can play an important financial role in the modernization of “agriculture, rural areas and farmers” in the province.
In fact, the reform of rural credit cooperatives has been on the road. Rural credit cooperatives at the provincial, prefectural and county levels are undergoing restructuring and reform. Most of the rural credit cooperatives at Prefecture, municipal and county levels have been restructured into regional agricultural and commercial banks because of their relatively small operation and management radiation.
According to the reporter, at the level of the reform of the provincial Associated Press, Jiangxi Province has proposed to “strive for the reform of the provincial associated press to be included in the national pilot”, Shaanxi Province has proposed to “actively strive for the national approval of the reform pilot of rural credit cooperatives in our province”, and Anhui Province has proposed to “strive for the rural credit cooperatives in our province to be the first to enter the national reform pilot”.
At present, the establishment of a “financial control company” is also a hot topic in the reform direction of the provincial associated press. Under this mode, the joint-stock reform of rural credit cooperatives within the jurisdiction of the province is implemented, and the provincial rural commercial bank is established, which is funded by the provincial finance and the self owned funds of the provincial state-owned enterprises and the provincial associated press as the main source of the capital stock of the provincial rural commercial bank, while absorbing the shares of excellent private enterprises within the jurisdiction.
In addition, the reform model of Guangdong Province has also been continuously concerned by the industry. According to previous media reports, at present, four large rural commercial banks in Guangdong Province, including Shenzhen rural commercial bank, Guangzhou rural commercial bank, Dongguan Rural Commercial Bank and Shunde rural commercial bank, hold shares in some other banks and cooperatives in the province. The unincorporated banks and cooperatives are still under the jurisdiction of the provincial Associated Press, cutting the rural credit system into five sectors. The sectors have equal status and are jointly managed by the provincial government.
Yang Changhan believes that rural credit cooperatives are an important part of rural finance, an important part of the commercial banking system, and an important financial service institution for rural economy, agricultural development and farmers’ life. Deepening the reform and standardizing the development of rural credit cooperatives is conducive to deepening the modernization of rural financial system, the development of “agriculture, rural areas and farmers” economy, and the realization of the goal of Rural Revitalization and common prosperity.
