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The change of the "top leader" of Wuxi Bank can also be seen as a response measure taken by the bank to the certain difficulties in its performance growth.

Text/Daily Financial Report Zhang Heng

Recently, the management of two listed rural commercial banks in Jiangsu Province changed simultaneously.

On the evening of August 5, Wuxi Bank issued an announcement stating that Shao Hui resigned from the positions of chairman, executive director and related positions of the board of directors' special committees due to work transfer. This also means that Shao Hui will no longer hold any position in the bank after his resignation.

It is worth noting that an announcement released by Zijin Bank on the same evening also revealed Shao Hui's next destination. According to the announcement, the board of directors unanimously passed the proposal to elect Shao Hui as a director candidate. The announcement also mentioned that Shao Hui is currently the party secretary of Zijin Bank.

So, with Shao Hui’s departure, who will take over as the new chairman of Wuxi Bank?

On the same day that Wuxi Bank issued an announcement of its chairman's resignation, the bank also issued a board resolution announcement, nominating Tao Chang as a candidate for executive director of the board. He currently serves as the bank's party secretary. According to banking industry practice, Tao Chang may take over as chairman of Wuxi Bank. Specific appointment information is still to be disclosed later.

Shao Hui, who has served as chairman of Wuxi Bank for more than 6 years, was "airdropped" to Zijin Bank

There were signs that Shao Hui would bid farewell to Wuxi Bank and move to Zijin Bank.

On the morning of August 2, the Nanjing Financial Development Promotion Association successfully held a mobilization meeting for the labor competition to help the financial industry develop new quality productivity. Shao Hui was invited to attend the meeting as the "Secretary of the Party Committee of Zijin Bank". At that time, there were market rumors that he would leave Wuxi Bank and start a new financial journey.

Now, three days later, the two rural commercial banks simultaneously issued announcements, which finalized Shao Hui's appointment adjustment. For him, the transfer between two heavyweight listed rural commercial banks in the province will definitely enrich his financial resume. At the same time, he will also integrate the management experience accumulated during his long-term tenure in Wuxi Bank into Zijin Bank, bringing new changes and more highlights to the bank.

Public information shows that Shao Hui is a "post-70s", now 53 years old, with a bachelor's degree, a master's degree, and the title of engineer and senior economist. Shao Hui's financial business development journey has always been concentrated in the Wuxi area. In his early years, he worked in Wuxi Tianyuan Electronic Technology Application Engineering Company, and then entered Wuxi Suburban Credit Union. He first served as the assistant section chief in the Computer Information Department. After years of grassroots experience, he was promoted to deputy director of Ganlu Credit Union of Wuxi Suburban Credit Union (in charge of work). Later, Shao Hui "transferred" to Jiangsu Xizhou Rural Commercial Bank, where he served as a member of the Party Committee and vice president; vice president, president, and deputy secretary of the Party Committee of Wuxi Bank. It was not until March 2018 that Shao Hui officially succeeded Ren Xiaoping as the Party Secretary and Chairman of Wuxi Bank.

By this calculation, as of August 5, Shao Hui has served as the chairman of Wuxi Bank for more than six years, close to the seven-year period set by regulators. This "transition" is in line with regulatory requirements.

It is worth mentioning that in Shao Hui's resignation report, Wuxi Bank highly praised his work and contributions and expressed its heartfelt gratitude:

"During his tenure as Chairman of the Bank, Mr. Shao Hui deeply practiced the political and people-oriented nature of financial work, worked diligently and forged ahead, and led the Bank to closely focus on the strategic goal of a new era value bank of 'deep, specialized, innovative and strong', adhere to the development direction of specialization, refinement, digitization and agility, stick to the main responsibility and business of serving the real economy, promote the integration of Party leadership into corporate governance, improve internal control to prevent and resolve various risks, and continuously improve the results of transformation, reform and development. Under the leadership of Mr. Shao Hui, the Bank's comprehensive strength has been further enhanced, transformation and adjustment have made continuous progress, risk management and internal control levels have been steadily improved, and various performance have achieved stable growth."

Former President Tao Chang returns to take over and may become the new chairman

With Shao Hui's transfer to Zijin Bank, Wuxi Bank's "top leader" has welcomed a new successor, who is also a "veteran" of the bank.

According to the resolution of the first extraordinary board meeting of Wuxi Bank in 2024 held on August 5, the bank has nominated Tao Chang, Chen Hongmei, You Yun and Fei Guodong as candidates for executive directors of the company's seventh board of directors.

According to the report disclosed in this proposal, Daily Financial Report found that the resumes of the above candidates show that Tao Chang, the former party secretary and chairman of Jiangsu Jingjiang Rural Commercial Bank, has already served as the party secretary of Wuxi Bank. If nothing unexpected happens, Tao Chang may replace Shao Hui as the new chairman of the bank.

Looking back at Tao Chang's financial resume, as an outstanding talent who gradually rose to senior management in Wuxi Bank, he once served as the bank's president. His career also included two important transfers, both of which were to other banks to hold senior management positions.

Public information shows that Tao Chang, who was born in September 1969, worked in Wuxi Bank for many years. He served as the assistant president of the bank and the president of Xishan District Branch, and was later promoted to vice president. After that, Tao Chang also served as the deputy secretary of the Party Committee, director, and president of Jiangsu Huai'an Rural Commercial Bank (in which Wuxi Bank holds a stake). In March 2018, he began to serve as the deputy secretary of the Party Committee, director, and president of Wuxi Bank. Until November 2023, Tao Chang resigned as president, Chen Hongmei took over as the new president, and Tao Chang was transferred to Jiangsu Jingjiang Rural Commercial Bank as secretary of the Party Committee and chairman.

In addition, the positions of Chen Hongmei, You Yun and Fei Guodong, who are candidates for executive directors of Wuxi Bank's board of directors, have also attracted much attention from the market. Without exception, they are all "veterans" of Wuxi Bank and currently serve as the bank's president, general manager of the planning and finance department, and director of the board office, respectively.

It is worth mentioning that the three executive director candidates are all very young. Among them, Chen Hongmei and Fei Guodong are of similar age, both born in the 1970s, while You Yun is even younger, being born in the 1980s in February 1984.

Public information shows that Chen Hongmei was once the deputy general manager of the risk management department, the deputy general manager of the compliance management department (in charge of work), and the general manager of the risk compliance department of Jiangsu Xizhou Rural Commercial Bank. She then joined Wuxi Bank and served as the general manager of the risk compliance department, the general manager of the compliance management department, the risk director and the general manager of the risk management department. She was later promoted to the party committee member, deputy president, and president of the bank.

Similar to Chen Hongmei, Fei Guodong also worked at Jiangsu Xizhou Rural Commercial Bank in his early years. He served as the deputy general manager of the bank's technology and information department. He then served as the deputy general manager of the technology and information department of Wuxi Bank, the general manager of the electronic banking department, the general manager of the retail banking department, the general manager of the inclusive finance department, the general manager of the consumer rights protection department, the general manager of the personal finance department, the president of Wuxi Bank Huishan District Branch, the general manager of the human resources department and other senior management positions. He is currently the employee supervisor, director of the Party Committee Work Department, and director of the Board of Directors Office of Wuxi Bank.

You Yun, who is currently the head of the financial department of Wuxi Bank, previously worked at the Suzhou branch of Deloitte China. He later served as department manager of the Financial Management Department of Wuxi Bank; deputy general manager and general manager of the Supervision and Audit Department; and general manager of the Audit Department.

The new leadership team has been basically determined. How can we push performance back on track for steady growth?

The change of the "top leader" of Wuxi Bank can also be seen as a response strategy taken by the bank to the certain difficulties in its performance growth.

It is undeniable that since its listing, Wuxi Bank's performance has generally maintained a growth trend. From the second year of its listing, that is, from 2017 to 2021, the bank's annual revenue growth rate has exceeded 10%, which also makes it an "excellent student" with stable performance in the eyes of investors.

But in 2022, Wuxi Bank's revenue growth of over 10% came to an abrupt halt, falling to 3.01% that year. By 2023, its revenue growth rate further declined to 1.28%. It is obvious that Wuxi Bank's performance growth rate has slowed down, which makes the market worry about the bank's ability to generate revenue.

Entering the new year of 2024, in the first quarter, Wuxi Bank's revenue growth rate was 5.02%. Although there was an increase, this growth was hard-won based on the low base year-on-year last year.

In-depth analysis shows that the slowdown in Wuxi Bank's operating income growth is the most direct impact of the decline in net interest income. We know that, like many banks, net interest income is the main source of income for Wuxi Bank, but in recent years, the growth of the bank's net interest income has fallen into a dilemma and cannot be extricated.

Data shows that from 2020 to 2023, Wuxi Bank's net interest income was 3.277 billion yuan, 3.504 billion yuan, 3.488 billion yuan, and 3.461 billion yuan, respectively, with year-on-year growth rates of 11.3%, 6.92%, -0.46%, and -0.78%, respectively. This downward trend in growth is particularly obvious, and even negative growth occurred in 2022 and 2023.

In the first quarter of 2024, although the bank's net interest income turned positive year-on-year, it only increased by 0.23%. It can be said that it is only one step away from negative growth, which also shows that the growth of this indicator is becoming increasingly weak.

So why is Wuxi Bank's net interest income under pressure? In fact, this is closely related to the bank's narrowing net interest margin indicator in recent years.

As we all know, net interest margin is one of the important indicators to measure the profitability of a bank. It reflects the ratio of a bank's net interest income to all its interest-earning assets. The level of net interest margin directly reflects the profitability of a bank. The larger the value, the stronger the profitability of the bank, which has an important impact on the financial health of the bank.

Data shows that from 2020 to 2023, Wuxi Bank's net interest margin has been declining year by year, from 2.07% to 1.64%, a decrease of 0.43 percentage points in four years. According to data released by the regulatory authorities, at the end of the fourth quarter of 2023, the net interest margin of commercial banks was 1.69%, which is lower than the overall range of commercial banks.

In the first quarter of 2024, the bank's net interest margin showed a further downward trend, falling to 1.44%, a decrease of 0.2 percentage points from the end of 2023.

In the future, whether Wuxi Bank's revenue growth rate can return to the high-growth track and solve the problem of weak downward net interest margin is indeed a long-term topic worthy of the bank's efforts and research.

At present, the former chairman has resigned and the former president has returned to the battlefield. As the new core leadership team is finalized, whether Wuxi Bank can achieve further development in performance will be left to the market and time to verify. We will wait and see.

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