Small and medium-sized banks have gradually normalized their replenishment of capital through fixed increases and tying of bad assets.
The targeted issuance document disclosed on the website of the China Securities Regulatory Commission shows that since this year, 19 small and medium-sized banks have issued fixed increase plans, of which 11 small and medium-sized banks have been increasing at the same time. Some non-performing assets were disposed of. 
During the year, 11 banks also disposed of some non-performing assets while increasing the fixed amount. News reporter Chen Peizhen statistics
From a geographical point of view, 4 of these 11 small and medium banks are in Guangxi, 3 in Guangdong, 3 in Hunan, and 1 in Anhui.
From the perspective of the non-performing assets of the tying per share, these 11 small and medium-sized banks are all issued at 1 yuan per share, and Guangdong Jieyang Rural Commercial Bank (hereinafter referred to as Jieyang Rural Commercial Bank) has a bad tying per share. The asset is the highest at 4.46 yuan; Guangxi Luchuan Rural Commercial Bank (hereinafter referred to as Luchuan Rural Commercial Bank) has the lowest non-performing asset per share, at 0.2 yuan. In addition, Guangdong Pingyuan Rural Commercial Bank, Guangdong Longchuan Rural Commercial Bank, Hunan Dongan Rural Commercial Bank, Hunan Yuanling Rural Commercial Bank, Hunan Leiyang Rural Commercial Bank, Anhui Huaining Rural Commercial Bank, Guangxi Longsheng Rural Commercial Bank, The non-performing assets of Guangxi Rong’an Rural Commercial Bank and Guangxi Pingxiang Rural Commercial Bank were 1.80 yuan, 1.5 yuan, 1 yuan, 1 yuan, 0.95 yuan, 0.6 yuan, 0.5 yuan, 0.35 yuan, and 0.25 yuan per share.
The targeted issuance of many banks shows that the fixed increase of capital is mainly to consolidate the bank’s capital strength, optimize the equity structure, prevent and resolve risks, and enhance the ability to withstand risks.
It is worth noting that the highest and lowest bank NPL ratios for tying non-performing assets per share do not meet regulatory standards. According to the targeted issuance, as of the end of September 2020, the non-performing loan ratios of Jieyang Rural Commercial Bank and Luchuan Rural Commercial Bank were 7.26% and 6.88%, respectively.
The targeted issuance of Jieyang Rural Commercial Bank shows that Shunde Rural Commercial Bank, the stock subscriber of Jieyang Rural Commercial Bank, is subscribing for 290 million sharesAt the same time as the shares, an additional payment of 4.4631 yuan/share is required to voluntarily contribute to the purchase of non-performing assets and repossessed assets of Jieyang Rural Commercial Bank as the underlying assets of the property trust beneficial rights. Jieyang Rural Commercial Bank’s current issue price is 1 yuan per share, the number of shares issued is 290 million shares, and the total amount of funds raised is 290 million yuan.
Luchuan Rural Commercial Bank’s directional issuance prospectus shows that for every RMB 1 invested by investors to subscribe for 1 share, an additional RMB 0.2 per share must be invested for the purchase of non-performing loan principal and interest. Luchuan Rural Commercial Bank has issued 200 million shares and raised a total of 240 million yuan.
In addition, although Guangdong Jiedong Rural Commercial Bank (hereinafter referred to as Jiedong Rural Commercial Bank) did not clearly indicate that it will deal with non-performing assets at the same time as the fixed increase, the bank’s targeted issuance book shows : While subscribing to shares, the target is required to pay no more than 9.44 yuan/share for voluntary subscription of the beneficiary rights of the property trust of Jiedong Rural Commercial Bank in accordance with the asset disposal plan of Jiedong Rural Commercial Bank (the specific subscription price is ultimately determined by the chairman According to the authorization of the general meeting of shareholders, adjustments will be made according to the assets and capital verification).
Jiedong Rural Commercial Bank’s directional issuance letter shows that the price of this directional offering is 1 yuan per share. That is to say, the target of this targeted issuance must pay no more than 10.44 yuan for each subscription for 1 share. The total amount of shares to be issued this time will not exceed 498 million shares, and the total amount of funds raised is expected to not exceed 498 million yuan, all of which will be subscribed in cash by the subscribers. This issuance of Jiedong Rural Commercial Bank identified three targets: Guangdong Shunde Rural Commercial Bank subscribed for 334 million shares, Guangdong Yuecai Investment Holdings Co., Ltd. subscribed for 134 million shares, and Jieyang City Golden Leaf Development Co., Ltd. subscribed for 30 million shares.
The news has observed that the non-performing loan rate of Jiedong Rural Commercial Bank has been much higher than the regulatory standard for a long time. As of the end of 2018, the end of 2019, and the end of September 2019, the ratios of loans overdue for more than 90 days and non-performing loans of Jiedong Rural Commercial Bank were 83.32%, 96.68%, and 97.93%; the provision coverage ratios were 55.94% and 61.27, respectively. %, 20.28%.
Jiedong Rural Commercial Bank’s targeted issuance statement explained that the main reason why the bank’s non-performing loan ratio did not meet regulatory requirements was: the borrower’s own mismanagement failed to repay the loan principal and interest on schedule; Credit risks are not resolved in time, accumulating credit risks, causing difficulties in clearing and resolving loans after overdue; some series of loans are still in the stage of raising funds for asset restructuring and on-lending activation, and risks have not been fully resolved yet.
recruitDong Ximiao, the chief researcher of United Finance, said in a news interview that banks will increase the option of subscribing for non-performing assets, which broadens the channels and methods for small and medium banks to dispose of non-performing assets. On the one hand, commercial banks must adopt a variety of measures to speed up the disposal of inventory of non-performing assets; on the other hand, they must adhere to standards, strictly control the production of new non-performing assets. Regulatory authorities should continue to take targeted measures to support commercial banks, especially small and medium-sized banks, to dispose of non-performing assets through multiple channels and efficiently. In the process of serving the real economy and transferring profits to real enterprises, governments at all levels should adhere to the principles of marketization and rule of law, maintain a sound financial ecological environment, and protect the legitimate rights and interests of commercial banks.
In August last year, the China Wealth Management 50 Forum (CWM50) led by the academic general counsel Wu Xiaoling completed the “Deepening the Reform of Small and Medium-Sized Banks and Improving the Quality and Effectiveness of Serving Small and Micro Enterprises— —The main problems faced by small and medium-sized banks and countermeasures.” The special report pointed out that large and medium-sized banks have more methods for disposing of non-performing assets, including asset securitization, the establishment of financial asset investment companies, and the pilot batch transfer of personal non-performing loans. Channels for banks to dispose of non-performing assets are relatively limited. It is recommended to further broaden the disposal channels of non-performing assets for small and medium-sized banks, such as guiding small and medium-sized banks to carry out pilot projects for the securitization of non-performing assets in an orderly manner in a market-oriented manner, and helping small and medium-sized banks to speed up the disposal of non-performing assets.