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China Fund News reporter Ma Jiaxin

Recently, the Dongguan Supervision Bureau of the State Financial Supervision and Administration issued an announcement stating that it agreed to Dongguan Bank's acquisition of 100% of the shares of Dongguan Houjie Huaye Rural Commercial Bank, and agreed to Dongguan Bank's establishment of Houjie Kangle Branch and Houjie Central Avenue Branch.

New case of "village-to-branch" reform

The Dongguan Supervision Bureau of the State Financial Supervision and Administration Bureau stated that it agreed to Dongguan Bank's acquisition of Dongguan Houjie Huaye Rural Commercial Bank. After the acquisition, it will hold a total of 100% of its shares, take over all its assets, liabilities, institutional outlets, rights and obligations, and establish Dongguan Bank Houjie Kangle Branch and Houjie Central Avenue Branch, and urge Dongguan Houjie Huaye Rural Commercial Bank to handle matters such as the dissolution of legal entities in accordance with regulations.

At the same time, Dongguan Bank should complete the acquisition in accordance with the requirements of relevant laws and regulations, and do a good job in the handover of institutions, businesses, systems, personnel, etc. In addition, after the establishment of the branch is completed, it should report to the branch in accordance with regulations.

This means that Dongguan will have a new case of "village-to-branch" where the main initiator bank acquires its village bank and sets up a branch.

The reporter noticed that recently, Dongguan Bank has also been increasing its acquisition of equity in its village banks. In May this year, Dongguan Bank acquired 15 million shares (5% equity) of Dongguan Changan Village Bank held by Dongguan Development Holdings Co., Ltd. (hereinafter referred to as Dongguan Holdings) at a base price of 29.107 million yuan, further consolidating its position as the largest shareholder of Dongguan Changan Village Bank.

According to the announcement, Dongguan Bank previously held a 20% stake in Dongguan Chang'an Rural Commercial Bank. After the success of this transaction, it will mean that Dongguan Bank's shareholding ratio will be further increased to 25%.

Continue to run towards the IPO listing "long run"

It is worth mentioning that recently, Dongguan Bank also updated its prospectus and disclosed the bank’s 2023 financial data. Its IPO review status also showed as accepted, continuing the bank’s IPO listing “long race”.

It is reported that on March 31 this year, Dongguan Bank's IPO was suspended due to the expiration of its financial information. At the same time, from the perspective of Dongguan Bank's listing process, it can be traced back to 2008, when the bank first submitted its application materials, and entered the IPO "implementation of feedback opinions" stage in 2012. In 2014, the bank's review was terminated due to failure to complete pre-disclosure.

At the beginning of 2019, Dongguan Bank returned to the A-share IPO queue and received feedback from the China Securities Regulatory Commission. After the full registration system was implemented, Dongguan Bank transferred its application materials to the Shenzhen Stock Exchange in March 2023. In September of the same year, Dongguan Bank updated its prospectus application on the main board of the Shenzhen Stock Exchange and planned to be listed on the main board of the Shenzhen Stock Exchange. Overall, Dongguan Bank has been on the road to listing for 16 years.

According to the latest disclosed financial report data, as of the end of 2023, Dongguan Bank's total assets were 628.925 billion yuan; operating income was 10.587 billion yuan, a year-on-year increase of 3.0%; net profit attributable to shareholders was 4.067 billion yuan, a year-on-year increase of 6.06%.

In terms of asset quality, as of the end of 2023, Dongguan Bank's non-performing loan ratio was 0.93%, and the scale of non-performing loans increased from 2.715 billion yuan in 2022 to 3.046 billion yuan in 2023.

In terms of capital adequacy ratio, as of the end of 2023, Dongguan Bank's capital adequacy ratio was 13.75%, its Tier 1 capital adequacy ratio was 9.91%, and its core Tier 1 capital adequacy ratio was 8.87%.

Editor: Joey

Audit: Wooden Fish

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