The bank's operating profit has shown a downward trend, and the sharp rise in business and management fees and asset impairment losses is swallowing up profits. At the same time, its bad rate has also risen from 0.91% to 2.09% in 6 years
Investment Times Researcher Jin Li
This is probably the worst New Year gift.
htmlOn February 1, information released on the website of the China Securities Regulatory Commission showed that Lanzhou Bank appeared on the list of companies suspended reviews of IPO of the China Securities Regulatory Commission. However, the China Securities Regulatory Commission did not explain the reason why the bank suspended the review, and Lanzhou Bank was also secretive about it.What is more intriguing is that just in early January, this bank, which had been planning for eleven years, was full of confidence in the successful conclusion in 2019. Based on the dramatic changes in the development of the situation, there are many speculations in the market, but Lanzhou Bank has never responded or clarified.
However, there is one thing that can be confirmed that the bank's poor operating performance is a fait accompli. Although Lanzhou Bank's net profit at the end of the third quarter of 2018 increased slightly compared with the same period of the previous year, its operating profit has actually shown a downward trend. At the same time, the sharp increase in its business and management fees and asset impairment losses is also swallowing up profits.
may be suspended due to changes in senior management
Until early January this year, the senior management of Lanzhou Bank and the relevant regulatory departments in the province may not have expected that the death was approaching.
According to local media reports, on January 7, Niu Xuefeng, Secretary of the Party Committee and Director of the Gansu Securities Regulatory Commission, said during an investigation at Lanzhou Bank that the bank has become a banner of urban commercial banks in the northwest region and claimed to be full of confidence in its future development. "I hope that the new leadership team of our bank will continue to work hard, do a good job in connecting the past and the future, and from summarizing past experiences, correctly understanding the listing of enterprises, solving problems in development, paying more attention to safety, taking listing as a phased work goal, and paying attention to the overall standards of enterprises."
responded, Xu Jianping, secretary of the Party Committee and chairman of Lanzhou Bank, said, "Through this research and discussion, our bank has a further understanding and understanding of the listing work, and Lanzhou Bank will give the above As an opportunity, combined with the formulation of future development strategy plans, we will start the next step in terms of strictly controlling risks, optimizing structure, strengthening management, improving quality and efficiency, and strive to realize the 11-year listing dream of Lanxingren in 2019. "
Lanzhou Bank is the first local joint-stock commercial bank with independent legal person status in Gansu Province. It was established by local finance, legal person and natural person based on the former 55 urban credit cooperatives and one credit cooperative cooperative in Lanzhou City. Originally named "Lanzhou City Cooperative Bank", it was approved for opening on May 28, 1997, and was changed to "Lanzhou Commercial Bank Co., Ltd." in August 1998, and was updated on May 23, 2008. As of December 31, 2017, the bank's registered capital was 5.126 billion yuan.
It is understood that since its name was renamed in 2008, Lanzhou Bank has set a plan to realize its IPO in three years. However, it was not until June 16, 2016 that the plan was approved by the Gansu Banking Regulatory Bureau. On July 1 of the same year, Lanzhou Bank pre-disclosed its prospectus to the China Securities Regulatory Commission, intending to list on the Shenzhen Stock Exchange SME Board, and the sponsor is CITIC Construction Investment Securities. In April 2018, the bank updated its prospectus.
However, just before the eve of the final strike, the listing work of Lanzhou Bank was pressed. There are many speculations about the reason for this suspension, and the most common one is the changes in the bank's executives.
On December 13, 2018, the head office of Lanzhou Bank held a cadre meeting. The executive vice minister of the Organization Department of Lanzhou Municipal Party Committee Wang Yongguo announced that Xu Jianping would be the candidate for the Party Secretary and Chairman of Lanzhou Bank. Fang Xiangyang, former chairman and member of the Party Committee, stepped down. At the same time, Tian Guoqiang was appointed as the deputy secretary of the Party Committee of the bank.
However, some investment bankers said that whether changes in senior executives will affect the IPO process, the main factor in the actual review is whether such changes will have a significant impact on the company and will not necessarily affect the IPO. Another market insider said that Lanzhou Bank announced the replacement of senior executives at a critical time, which obviously had done various deductions and believed that it would not hinder the listing.
The real reason for the temporary "stop" is that since none of the parties disclosed detailed information, the outside world can only interpret it in the clouds and mountains, but Lanzhou Bank's IPO plan will undoubtedly be delayed again.
htmlOn February 16, the bank issued the "Notice of Lanzhou Bank Co., Ltd. on the Convening of the First Extraordinary General Meeting of Shareholders in 2019". It is reported that two proposals in the above-mentioned "Notice" involve IPO, namely the "Proposal on the Validity Period of the General Meeting of Shareholders' Resolution on the Plan for the Initial Public Offering and Listing of Lanzhou Bank Co., Ltd.", and the "Proposal on the Extension of the Validity Period of the General Meeting of Shareholders' Resolution on the Authorization of the Board of Directors to Fully Handle the Validity Period of the General Meeting of Shareholders' Resolution on the Resolution on the Authorization of the Board of Directors to Fully Handle the Validity Period of the General Meeting of Shareholders' Resolution on the Related Matters for the Initial Public Offering and Listing of this Initial Public Offering and Listing".Soaring operating expenses have hit low profits
listing has been temporarily suspended, which will not only hurt morale, but will also increase the pressure on the capital that Lanzhou Bank has already been tight.
From the end of 2015 to the end of 2017, the bank's capital adequacy ratio was 11.5%, 12.52%, and 12.5%, respectively. The Tier 1 Capital Adequacy ratio and core Tier 1 Capital Adequacy ratio were 9.92%, 9.85%, and 9.98%, respectively. During the same period, the average capital adequacy ratio of urban commercial banks was 12.59%, 13.28%, and 13.65%, respectively. This also means that the bank's capital adequacy situation has continued to be lower than the industry average in recent years, and the capital pressure is higher than that of more than half of the city commercial banks.
At the same time, the hidden concerns about the asset quality of Lanzhou Bank are also continuing to increase, and are higher than the level of urban commercial banks during the same period. Judging from the data in the past five years, from the end of 2013 to the end of 2017, the non-performing loan ratio of Lanzhou Bank was 0.91%, 1.13%, 1.8%, 1.77% and 2.09% respectively. Data from the former China Banking Regulatory Commission showed that the overall average non-performing rate of urban commercial banks during the same period was 0.88%, 1.16%, 1.40%, 1.48%, and 1.52%, respectively. Except in 2014, they were all higher than the latter level and had a trend of amplification.
It is worth noting that in 2017, the overdue loans of Lanzhou Bank increased by 2.699 billion yuan, a year-on-year increase of 73.78%; among which loans with overdue interest within 90 days but whose principal has not expired increased by a large increase, totaling 1.179 billion yuan. In response, Lanzhou Bank explained that "it is mainly caused by some customers' short-term capital turnover difficulties and the inability to pay interest on time."
Judging from the data in 2018, Lanzhou Bank's operating pace is showing more obvious fatigue.
2018 third quarter report shows that as of the end of September 2018, the bank's total assets reached 286.336 billion yuan, and achieved total operating income of 5.043 billion yuan and net profit of 1.889 billion yuan in the first three quarters. At the end of 2017 and the end of September, the bank's total assets were 266.506 billion yuan, and in the first three quarters, it achieved total operating income of 4.775 billion yuan and net profit of 1.866 billion yuan.
Comparing the data in the two periods, the total operating income increased by 268 million yuan, but the net profit growth was not large.
In fact, the bank's total profit at the end of the third quarter of 2018 was not as good as the same period last year. The data at that time was 2.305 billion yuan, while the total profit at the end of the third quarter of 2017 was 2.356 billion yuan. The reason why the net profit in the first three quarters of 2018 was slightly higher than the same period in 2017 was due to the reduction in income tax expenses.
Judging from the financial report, the increase in operating expenses is the direct reason for the year-on-year decline in operating profits in the first three quarters of 2018.
The bank's operating expenses in the first three quarters of 2018 were 2.738 billion yuan, and at the end of the first three quarters of 2017, it was 2.438 billion yuan. In addition to other business expenditures, other projects have increased to a certain extent, except for other business expenditures, which have seen the largest increase in business and management fees and asset impairment losses. The two increased by 156 million yuan and 140 million yuan year-on-year respectively, with an increase of 10.08% and 16.53% respectively. In the
rating agency Chengxin also mentioned the many challenges facing Lanzhou Bank in the tracking and rating report, including the impact of business operations and asset quality due to changes in the local economic and financial environment, the need to improve the business and revenue structure, the higher requirements for risk control capabilities in changes in the economic environment and business growth, and the still exist cross-regional operating risks.
has not been successfully listed yet, so comrades need to work harder. Perhaps, this will become the motto of the new Lanzhou Bank executive team in 2019.
