Text｜Yan Qinwen Yu Yan

Editor｜Yuan Man

After Xiamen Bank , Bank of Chongqing became the second bank to successfully pass the A-share market this year. At this point, the number of domestic banks that have completed the "A H" share layout is expected to rise to 15.

On the evening of August 27, the China Securities Regulatory Commission website released the "Announcement on the Review Results of the 126th Meeting of the 18th Issuance Review Committee in 2020". The initial application applications of six companies including the Bank of Chongqing were all approved.

From the submission of the prospectus in 2018 to this meeting, Bank of Chongqing has been "waiting" for A-shares for more than two years. Prior to this, Xiamen Bank successfully passed the meeting on July 16, and its IPO process was also nearly two years ago.

After the “blowout” year of bank listings in 2019, the pace of bank stock IPOs has slowed down significantly in 2020. In addition to Xiamen Bank and Chongqing Bank, which have already passed the meeting, only Bohai Bank has successfully been listed on the Hong Kong stock market, and there are still 20 banks "queuing" waiting for IPO.

According to public information, Bank of Chongqing was listed on the Hong Kong Stock Exchange on November 6, 2013. It was the first city commercial bank in the country to be successfully listed on the main board of the Hong Kong Stock Exchange. If it successfully "returns to A", the bank will become the third city commercial bank to implement the "A H" share layout.

According to the bank’s first quarter report, as of the end of the first quarter, the total assets of Bank of Chongqing were 511.26 billion yuan, an increase of 2.0 from the beginning of the year, which was twice that of Xiamen Bank. From January to March, the bank achieved a net profit of 1.406 billion yuan, a year-on-year increase of 14.1%.

In terms of asset quality, the balance of non-performing loans of Bank of Chongqing was 3.263 billion yuan, an increase of 132 million yuan from the end of the previous year; the non-performing loan ratio was 1.27, the same as the end of the previous year; the provision coverage ratio was 292.31, an increase of 12.48 points from the end of the previous year. percentage point.

It is worth noting that during the review of this listing, the issuance review committee raised questions about the bank's non-performing rate. It is reported that from 2017 to 2019, the non-performing loan ratios of Chongqing Bank were 1.35%, 1.36% and 1.27% respectively. The issuance review committee required the bank to explain the reasons for the decline in the non-performing loan ratio in 2019. In addition, during the reporting period, Bank of Chongqing conducted multiple transfers of non-performing loans, and the Issuance Review Committee required Bank of Chongqing to explain the specifics of the process.

According to the first quarter report, Lifan Industrial (Group) Co., Ltd. (referred to as "Lifan Group", shareholding ratio 4.14) and Peking University Founder Group Co., Ltd. (referred to as "Peking University Founder", shareholding ratio 3.02) are the fifth and sixth largest shareholders of Bank of Chongqing's domestic shares respectively.

On August 7, Lifan Co., Ltd. issued an announcement stating that the company’s controlling shareholder Lifan Holdings applied to the Chongqing No. 5 Intermediate People’s Court on the grounds that it could not pay off its due debts and its assets were insufficient to pay off all debts. Judicial restructuring.

On August 24, Lifan Co., Ltd. received the "Civil Ruling" and "Decision" from the Fifth Intermediate People's Court of Chongqing, ruling to accept the lawsuit filed by the creditor Chongqing Jiali Jianqiao Lighting Co., Ltd. against the company The company applied for reorganization and designated the liquidation team of Lifan Group as the manager of Lifan shares.

According to Lifan’s semi-annual report, as of June 30, 2020, the company’s deposit balance in the Bank of Chongqing was 6.3344 million yuan; the loan balance was 1.185 billion yuan, of which 598 million yuan was short-term borrowings, and 598 million yuan was long-term borrowings. Borrowing 587 million yuan.

The Issuance Review Committee also mentioned Lifan Shares in its inquiry, "The issuer has not identified the loans of two large-scale enterprise groups such as Lifan and Loncin as non-performing loans. At present, Lifan, a listed company under Lifan Group, The shares have entered bankruptcy reorganization procedures.

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In response to the above issues, the Issuance Review Committee required the bank to explain the specific impact of Lifan Group’s reorganization application, whether the risk classification of Lifan Group’s loans needs to be adjusted, and whether the provision for loan impairment losses is sufficient; the explanation has not been Whether the basis for classifying the loans within the above two enterprise groups as non-performing loans is sufficient and whether there is any circumvention of relevant regulatory requirements; and combined with the latest operating conditions of Lifan Co., Ltd., debt repayment or disposal status, etc., explain whether the loans to the company are There are large impairment risks, etc.

In addition, the Issuance Review Committee also noticed flaws in the historical changes in state-owned equity of the Bank of Chongqing, and there are currently restrictions or changes in the equity of major shareholders, and requested the bank. Explain the specific situation and risks.

On December 23, 2015, Chongqing Bank issued a request to SAIC Group (held through its wholly-owned subsidiary SAIC Hong Kong), Fude Life Insurance and its wholly-owned subsidiary Fude. Resource Investment Holding Group Co., Ltd. issued 422 million H shares at a placement price of HK$7.65 per share, increasing its registered capital by 422 million yuan.

Among them, Fude Life Insurance holds 150 million H shares of Bank of Chongqing. Fude Resources Investment Holding Group Co., Ltd., a wholly-owned subsidiary of Fude Life Insurance, holds 67.5702 million H shares of Bank of Chongqing. It is worth noting that as of the date of signing of the prospectus (May 21, 2019), Fude Resources Investment Holding Group Co., Ltd. Sino Life Insurance has not yet obtained shareholder qualification approval.

Regarding whether the above issues will affect the listing of Bank of Chongqing, Zhou Maohua believes that whether the bank can eventually go public depends on whether it meets the basic listing conditions, such as: internal company Whether governance is in place, whether information disclosure complies with regulations, whether there is falsification of financial information, whether there are unresolved legal disputes, etc.

In fact, the road to the A-share listing of Bank of Chongqing is quite bumpy.

As early as 2007, Bank of Chongqing submitted an application for A-share listing, but there was no progress.

In 2013, Bank of Chongqing, which failed to achieve success in A-share listing, switched to H-share listing. On the first day, the bank fell below the issue price of HK$6. Since then, the Hong Kong stock price has been in a state of breaking for a long time. According to wind data, as of the close of August 28, Chongqing Bank reported a price-to-book ratio of only 0.37 times. .

In 2018, the Bank of Chongqing once again put the A-share listing on the agenda, and after more than two years, it will finally be listed on the Shanghai Stock Exchange. An application for listing was submitted at the end of the year. In October 2018, the bank updated its pre-disclosed prospectus.

According to the annual report, as of 2019, Xiamen Bank’s operating income was 4.509 billion yuan, a year-on-year increase. 7.73; net profit was 1.736 billion yuan, a year-on-year increase of 22.69. The non-performing loan ratio was 1.18, a decrease of 0.15 percentage points from the end of the previous year; the provision coverage ratio was 274.58, a year-on-year increase of 61.75 percentage points.

It is understood that Xiamen Bank is known for its radical style in the banking industry and is known as a major online loan fund depository in the industry. At its peak, it had access to more than 30 online loan platforms.

A banking industry insider pointed out that Xiamen Bank's successful "breakthrough" is not only due to its own business indicators and corporate governance structure, but also to a certain extent related to the support and policy environment of its respective local governments.

Among them, the most recent pre-disclosure update was Shanghai Rural Commercial Bank, which updated its prospectus on July 8 The application draft is one step closer to listing. An investment industry insider predicts that if all goes well, Shanghai Rural Commercial Bank may become the third bank to be listed this year.

In addition to Shanghai Rural Commercial Bank, there are 14 banks in the status of IPO pre-disclosure update. Its pre-disclosure time shows that some banks have been waiting for a long time.

Among them, Ruifeng Rural Commercial Bank, Lanzhou Bank, Dafeng Rural Commercial Bank, Xiamen Rural Commercial Bank and Yaodu Rural Commercial Bank were already in the pre-disclosure update status as early as 2018, and have made no progress since then. Among them, Ruifeng Rural Commercial Bank has been waiting the longest. Its listing application was accepted by the China Securities Regulatory Commission as early as November 2016. However, nearly four years have passed and there is still no new progress.

It is worth noting that among the large number of people waiting at the scene, almost all are small and medium-sized banks such as city commercial banks and rural commercial banks.

A financial market person pointed out that the slow progress of bank IPOs is related to the operating conditions of small and medium-sized banks. "Small and medium-sized banks generally have extensive business models and relatively insufficient operating capabilities. Since they mainly serve regional small, medium and micro enterprises, they will face great pressure under the impact of this year's epidemic, which may discourage investors."

According to the previous IPO rhythm, the time from meeting to listing can range from two to three months to six months. Based on this calculation, following Xiamen Bank, Chongqing Bank is expected to officially join the A-share queue before the end of the year.

Since the beginning of this year, against the background of increased efforts to provide profits to support the real economy, banks have increased credit extension to the real economy. Adding to the impact of the epidemic, bank asset quality has come under pressure. “Building blood” has become an urgent task for banks, especially small and medium-sized banks.

On the one hand, the write-off of non-performing assets has created an urgent need for banks to replenish capital. As the first listed bank to announce its interim report, Bank of Jiangsu's net profit growth declined due to increased provisioning. The bank stated in the report that in order to reduce non-performing assets, the non-performing loan ratio dropped from the end of the previous year, and the provision coverage ratio continued to increase. As of the end of the reporting period, the total non-performing loans of Jiangsu Bank were 15.62 billion yuan, of which the non-performing corporate business improved, but Personal business non-performing loans have increased.

The Bank of Chongqing, which successfully passed the meeting, stated in its prospectus that it plans to issue no more than 781 million shares, and all the funds raised after deducting issuance expenses will be used to enrich core tier one capital.

According to data disclosed by the Bank of Chongqing, the bank does need to improve its capital adequacy ratio. From 2016 to 2019, the core tier one capital adequacy ratios of Bank of Chongqing were 9.82, 8.62, 8.47, and 8.51 respectively. As of the end of the first quarter of this year, the core tier one capital adequacy ratio of Chongqing Bank was 8.7, a slight increase from the end of the previous year; compared with the data previously released by the China Banking and Insurance Regulatory Commission (the core tier one capital adequacy ratio of commercial banks was 10.88), this coverage ratio was still 10.88. There is room for improvement.

In addition, many small and medium-sized banks have launched private placement plans for "tying" non-performing assets: while issuing shares in a targeted manner, investors who subscribe for shares are required to purchase non-performing assets. Since this year, small and medium-sized banks including Guangdong Sihui Rural Commercial Bank, Shanxi Zezhou Rural Commercial Bank, Shandong Zhucheng Rural Commercial Bank and other small and medium-sized banks have launched this plan.

A bank analyst pointed out that under the influence of the epidemic, bank asset quality has been under pressure, and private placement of non-performing assets can help banks improve their capital adequacy ratios while easing the pressure on banks to dispose of non-performing assets.

Data from the China Banking and Insurance Regulatory Commission shows that as of the end of the first quarter of this year, the capital adequacy ratios of large banks and joint-stock banks were 16.14 and 13.44 respectively, while the capital adequacy ratios of city commercial banks and rural commercial banks were 12.65 and 12.81, respectively. Compared with the industry average, the non-performing rate has increased to a certain extent compared with the end of last year.

On July 16, Liu Rong, deputy director of the City Commercial Bank Supervision Department of the China Banking and Insurance Regulatory Commission, said that without considering external capital supplements, the capital adequacy level of city commercial banks may decline significantly in the next three years. .

Since the beginning of this year, the China Banking and Insurance Regulatory Commission has repeatedly publicly raised the issue of capital replenishment for small and medium-sized banks and proposed multiple channels to replenish small and medium-sized capital. On May 27, the Financial Commission also announced that it would issue a "Work Plan for Deepening Reform and Replenishing Capital of Small and Medium-sized Banks" to further promote the deepening of reforms of small and medium-sized banks, accelerate the replenishment of capital by small and medium-sized banks, and raise funds through multiple channels.

In addition to allowing local government special bonds to reasonably support small and medium-sized banks in replenishing capital and other new channels, direct financing in the capital market through listing has become the biggest desire of small and medium-sized banks.

"Small and medium-sized banks are an important force in supporting weak links in the real economy such as small and micro enterprises, rural areas and farmers. By accelerating the listing of small and medium-sized banks and replenishing capital, the ability of small and medium-sized banks to serve the real economy can be improved as soon as possible. It is expected that the internal equity structure The pace of listing of small and medium-sized banks with clear, standardized governance, reasonable balance sheets and reasonable pricing will be accelerated," Zhou Maohua added.