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01

Another million-dollar fine

When it comes to Zhejiang-based banks, the one that has made the most money quietly is Hangzhou Bank.

Usually not showing off, relatively low-key,Not as aggressive as other Zhejiang banks.

Similar to Zheshang Bank, it is the mainHigh loan amount, high interest rate, and aggressive loan disbursement.(A high loan ratio refers to a high proportion of the loan amount to the value of the collateral. For example, if the loan amount is 80% of the value of the collateral, it is called a high loan ratio.)

For example, Mintai and Tailong focus on credit.Small business owners focus on operations.

Hangzhou Bank is relatively standard and even more affordable than other Zhejiang banks. Compared with the annualized interest rate of 6-8%, Hangzhou Bank is basically about 15-20% cheaper.

Looking closely, Hangzhou Bank still has many advantages, such as both one-mortgage and two-mortgage. It does not attach much importance to business requirements, but focuses on formal inspection. If the license is less than one year old, we can negotiate. If the loan amount is small, the cash flow can also be negotiated.

But even such a prominent local bank has recently received a series of fines.

On August 15, the administrative penalty information disclosed by the Zhejiang Regulatory Bureau of the State Financial Regulatory Administration showed that due to three illegal and irregular behaviors,Hangzhou Bank was fined 1.1 million yuan.

Judging from the publicized penalty information, the mainIllegal collection of entrusted loan fees from borrowers, imprudent measurement of risk asset weights of interbank wealth management products and submission of erroneous data to regulatory authorities; quality issues in some EAST dataAnd other illegal and irregular behaviors.

In addition to issuing fines to the bank, the individuals involved were also punished - Zhang Xuan, then assistant general manager of the Financial Development Department 4 of the Beijing Branch, Fu Baisan, customer manager of the Jiande Branch, Wan Li, customer manager of the Xihu Branch, and Sun Leilei, president of the Pengbu Branch, were responsible for the above-mentioned illegal and irregular acts and were all given warnings.

This is not the first time that Hangzhou Bank has received a fine at the regulatory level this year.

In January 2024, Hangzhou Bank received the No. 1 penalty notice from the Zhejiang Regulatory Bureau of the Financial Regulatory Administration.Fined 2.1 million yuan, the then deputy general manager of the investment banking department of the Nanjing branch was warned and punished.

In March 2024, the Zhoushan branch of the bank was found to have committed three major violations of laws and regulations, including imprudent management of its business with a financial leasing company.Fined 1 million yuan, the then customer manager of Zhoushan Dinghai Chengguan Small and Micro Enterprise Branch was given a warning.

Since the beginning of 2024,Hangzhou Bank has received three regulatory fines, each of which exceeded 1 million yuan, with a total fine of 4.2 million yuan.

Jokingly speaking, Hangzhou Bank is the Zhejiang-based bank that has been the most heavily fined this year.

02

The “excellent student” who repeatedly makes mistakes

It is not surprising that Hangzhou Bank received a fine. Some people even feel that they received too few fines.

A few months ago, they had a big mistake.

The incident happened on April 19. In the annual profit distribution plan announcement, Hangzhou Bank announced"Cash dividend of RMB 5.20 per share."

As soon as the news came out, the shareholders were overjoyed. Is it possible to give away money in this way?

At that time, the share price of Hangzhou Bank was only around 10 yuan per share!

But soon, Hangzhou Bank issued a "Correction Announcement on the 2023 Profit Distribution Plan Announcement", stating that due to staff negligence, there was a typo in the "per share distribution ratio" in the important content of the announcement. After the correction:

The distribution ratio per share is a cash dividend of RMB 0.52 (tax included) per share.

I originally thought that for a stock that costs 10 yuan per share, shareholders would be given 5.2 yuan per share, but it turned out that two decimal points were written incorrectly!

In a short period of time, shareholders of Hangzhou Bank experienced a roller coaster ride.

Looking back, this is not the first time that Hangzhou Bank has made such a mistake.

For example, in May 2019, Hangzhou Bank issued a "Correction Announcement on the 2018 Annual Report", which showed thatThere was a mistake in the bank's annual report about the total assets of Hangzhou Bank Consumer Finance, with 5.946 billion yuan written as 8.946 billion yuan.

In September 2016, Hangzhou Bank announced the "Hangzhou Bank Co., Ltd. Initial Public Offering Prospectus" summary:The "billion" in the fundraising amount was written as "ten thousand", and 3.767 billion yuan was written as 3.767 million yuan.

It can be seen from these three blunders that Hangzhou Bank has had major problems with its internal management for at least the past seven or eight years!

Even such an important prospectus can be written wrong! Even such an important dividend distribution plan is wrong!How the secretary wrote it and how it went through various levels of review before finally being signed by the bank president was simply a farce.

If it is true, how many levels of review does such a large organization have to go through before releasing information? Is there no review?

Such a low-level mistake? Take an administrative department with dozens of people as an example. The release of information must be signed and approved by the person in charge, the section chief, the deputy director and the top leader.

In such a large listed company, what are the executives at all levels doing?

The secretary to the board of directors of a listed company is responsible for information disclosure and is one of the executives with the closest relationship with investors. The vice president and secretary to the board of directors of Hangzhou Bank is Mao Xiahong, whose salary last year reached 2.48 million yuan.

It is hard not to doubt the true level of Hangzhou Bank’s senior executives.

Of course, the other auditors also exposed big problems.If one person makes a mistake, then all others will make a mistake. Will the public review the announcement? With such careless behavior, how can the outside world see the annual report performance that has been issued?

No wonder they were fined this time for two reasons:

The risk asset weights of investments in interbank wealth management products were not measured prudently and erroneous data were submitted to regulatory authorities;

Some EAST data have quality issues.

It seems that carelessness and sloppiness are an old tradition of Hangzhou Bank.

03

Is Hangzhou Bank still trustworthy?

So many low-level mistakes should not have happened to Hangzhou Bank.Judging from the past, they are also considered the top students among local banks.

The predecessor of Hangzhou Bank was Hangzhou City Credit Cooperative.

In the early days, urban credit cooperatives had problems such as weak business capabilities of their staff and low social credibility. Some urban credit cooperatives even had asset holes."Chaos" is an accurate summary of urban credit cooperatives, and Hangzhou Urban Credit Cooperative is no exception.

In the 1990s, some customers even said bluntly:

"You are the original credit union, right? I heard that your boss got into trouble? Now you change your name to Cooperative Bank. It's unreliable. This bank will go bankrupt sooner or later."

Hangzhou Bank, which was born out of an urban credit cooperative, had a shockingly large asset hole, poor social reputation, and a weak staff team at the beginning.When it was founded, the bank's registered capital was only 300 million yuan, total assets were less than 6 billion yuan, and the loan balance was 2.84 billion yuan. However, risky loans were as high as more than 2 billion yuan, accounting for 70.4%. Even daily fund settlement was very tight.

From the perspective of the time, this bank, which had been established for less than a year, could go bankrupt at any time.

However, after years of development, Hangzhou Bank has long stepped out of the influence of urban credit cooperatives and grown from a local bank to a national financial institution. It was listed on the A-share market in 2016, becoming one of the 17 listed city commercial banks, and its total assets have increased 300 times!

In 2023, the performance of Hangzhou Bank also soared, with double-digit profit growth, leaving other banks behind. According to the EY report, the overall growth rate of net profit of listed banks was only 1.43%, while that of Hangzhou Bank was as high as 23.15%.

It is very impressive to achieve this overall result when the banking industry is generally under pressure.

However, it is such a bank that has repeatedly caused such blunders.This has caused investors to doubt the "value" of their data.

Hangzhou Bank's dividends in recent years have been getting closer and closer to the lower limit of the company's articles of association. From 2019 to 2022,The cash dividend ratios of Hangzhou Bank were 34.13%, 31.37%, 24.55%, 21.82% and 22.52% respectively, showing an overall downward trend.

Its cash dividend ratio in 2023,Ranked 33rd among all 41 A-share banks that pay dividends, which is only higher than 5 banks among the 17 city commercial banks and ranks 6th from the bottom.

The gradually shrinking dividends will inevitably make people question the profitability of Hangzhou Bank.

It should be noted that in recent years, various indicators of Hangzhou Bank have been rising. In the 2023 annual report, the asset scale of Hangzhou Bank continued to rise, reaching 1,841.3 billion yuan, a year-on-year increase of 13.9%. The operating income also maintained the upward trend since 2019, reaching 35 billion yuan, a growth rate of 6.33%. The net profit attributable to the parent company was 14.4 billion yuan, an increase of 23.15%, and the basic earnings per share was 2.31 yuan/share, an increase of 26.23%.

Even in 2024, the data they disclosed was better than expected. From January to June 2024, Hangzhou Bank achieved operating income of 19.34 billion yuan, a year-on-year increase of 5.36%; and achieved a net profit attributable to shareholders of listed companies of 9.996 billion yuan, a year-on-year increase of 20.06%!

In terms of asset size, as of the end of June 2024, the total assets of Hangzhou Bank were 1,984.792 billion yuan, an increase of 7.79% from the end of the previous year.

On the one hand, profits continue to hit new highs, and on the other hand, Hangzhou Bank's financing pace is also accelerating.

On the evening of April 19, Hangzhou Bank announced that it was approved to issue financial bonds in the national interbank market and overseas markets, and the new balance of financial bonds in 2024 will not exceed5 billion yuan.

On the same day,Hangzhou Bank is working non-stop to come up with new money-making plans.The board of directors agreed that the company may issue no more than RMB 100 million in the inter-bank bond market.50 billion yuan(Including 50 billion yuan) financial bonds that are not of a capital supplement nature.

More noteworthy is thatHangzhou Bank, whose performance has grown by leaps and bounds, has to tighten its belt to survive.According to the 2023 financial report, some media estimated that the average annual salary of Hangzhou Bank employees in 2023 will drop from 589,500 yuan last year to 517,800 yuan.The average salary cut was about 71,700 yuan, a drop of 12.17%.

In this light, the true situation of Hangzhou Bank is very interesting.

If they are really as good as the data on paper, then all they need to do next is make fewer "low-level mistakes" and receive fewer fines and complaints.

But if the rigor of the data on paper is as good as the mistake they made, then Hangzhou Bank may have many hidden problems.

However, these are merely subjective conjectures based on the existing information, and ultimately they still need to be scrutinized by the market and tested by time.