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another rural credit cooperative was dissolved due to merger. on september 8, a beijing business daily reporter noticed that recently, atushi city rural credit cooperative union, akto county rural credit cooperative union, aheqi county rural credit cooperative union, and wuqia county rural credit cooperative union were dissolved due to new mergers. the xinjiang kezhou rural commercial bank, which absorbed the four rural credit cooperatives, was officially opened on september 7.

as the reform of rural credit cooperatives continues to deepen, more and more provincial and municipal rural commercial banks have emerged. in the process of mergers and absorptions, the number of rural credit cooperatives has also been shrinking. in the past year, 62 institutions have "disappeared." in the view of analysts, as the reform of rural credit cooperatives deepens, the number of subsequent institutions is expected to continue to decrease. after the rural credit cooperatives are absorbed and merged into rural commercial banks, they will have stronger risk resistance and better development space.

four rural credit cooperatives announced their dissolution

the xinjiang regulatory bureau of the state financial supervision and administration bureau recently issued an announcement, announcing that the atushi city rural credit cooperative, akto county rural credit cooperative, aheqi county rural credit cooperative, and wuqia county rural credit cooperative will be dissolved due to the establishment and merger of the xinjiang kezhou rural commercial bank. all businesses, properties, debts and claims, and other rights and obligations will be inherited by the xinjiang kezhou rural commercial bank.

it is understood that the unified legal person reform plan of the kezhou rural credit cooperative began to be planned in july last year. on august 5 this year, the xinjiang kezhou rural commercial bank announced that it had been approved for establishment, with investment from companies such as the xinjiang financial investment company.

subsequently, the preparatory work was accelerated, and the founding meeting and the first shareholders' meeting of xinjiang kezhou rural commercial bank were held on august 29. on september 5, the xinjiang supervision bureau of the state financial supervision and administration bureau approved the qualifications of mei yun as the chairman of xinjiang kezhou rural commercial bank and deng gang as the president of xinjiang kezhou rural commercial bank.

two days later, xinjiang kezhou rural commercial bank officially opened for business. it is reported that the bank has a net capital of 700 million yuan and an asset scale of 7 billion yuan. zheng yufeng, party secretary and chairman of xinjiang uygur autonomous region rural credit cooperative union, said that kezhou rural commercial bank will strive to become the main bank serving rural revitalization, the main bank supporting small and micro enterprises and private economy, and the main bank serving local economic development and the construction of the "nine major industrial clusters".

the xinjiang kezhou rural commercial bank is the second unified legal person rural commercial bank in xinjiang. in december last year, the aksu tarim rural commercial bank, which was established by the merger of the original five rural commercial banks and three rural credit unions in aksu prefecture, opened for business, becoming the first unified legal person rural commercial bank in xinjiang. it is reported that from the end of 2023 to the end of august this year, the bank's loan balance was 61.485 billion yuan, an increase of 1.027 billion yuan and 1.67% compared with before the unified legal person reform.

"regionally, city-level rural commercial banks are mainly suitable for the northeast and central and western regions," said dong ximiao, chief researcher of ccb. on the one hand, the establishment of city-level rural commercial banks will help to exert the economies of scale, moderately expand the operating areas of rural credit institutions, and expand development space and capabilities on the premise of taking root in the local area; on the other hand, it will help to strengthen resource integration, especially at the city level, enhance brand image, and better connect with local governments and enterprises and institutions. in addition, it will help to "gather together for warmth", introduce strategic investors, optimize the management system, enhance capital strength and risk resistance, reduce operating and management costs, improve communication and coordination efficiency, and concentrate more manpower, material resources, and financial resources to serve customers and the real economy.

absorption and merger will continue to accelerate

as the reform of rural credit cooperatives continues to deepen, more and more provincial rural commercial banks have emerged. this year, hainan rural commercial bank was unveiled and henan rural commercial bank was also announced to be established. at the same time, the city-level unified legal person rural commercial banks are also progressing steadily. in addition to xinjiang kezhou rural commercial bank, nanchong city in sichuan province previously revealed that it has started the work of establishing a city-level unified legal person rural commercial bank.

the establishment of provincial and municipal rural commercial banks was also accompanied by the absorption and merger of some rural credit cooperatives. in the process of merger and absorption, the number of rural credit cooperatives has been shrinking. according to the list of legal persons of banking financial institutions, as of the end of june 2024, there were 3,938 banking institutions in my country, a decrease of 64 in half a year and 121 in a year compared with the data in 2023. among them, the number of rural credit cooperatives decreased by 16 in half a year, and 62 "disappeared" in a year.

regarding the reasons for the gradual reduction of banking institutions such as rural credit cooperatives, xue hongyan, deputy director of the xingtu financial research institute, said that in the past few years, the financing demand of the real sector was strong, especially the financing demand of local financing platforms and infrastructure investment, which created good conditions for the development of local financial institutions. small and medium-sized banks face competition from national banks and have relative advantages in specific areas, and their living environment is relatively good. in recent years, as the old momentum has gradually weakened, the financing demand of the real sector has been weak, high-quality loan assets have been scarce, and small banks lack the space to maneuver at the regional level. the pressure to survive has increased, and their competitiveness has declined. in the context of digital transformation, they are facing pressures from talents, funds, user bases, etc., and some institutions have even become potential sources of risk. in this context, mergers and reorganizations have become an important means to resolve potential risks.

in order to optimize the layout of banking institutions, reshape the operating mechanism, and promote the continuous convergence of risks, on may 24, the party branch of the rural and small and medium-sized bank supervision department of the state financial supervision and administration bureau wrote an article mentioning that it will accelerate the promotion of mergers and reorganizations of rural small and medium-sized banks and reduce the number and levels of rural small and medium-sized bank institutions.

"in the future, the number of banking institutions such as rural credit cooperatives will gradually decrease," dong ximiao said. under the premise of adhering to marketization and rule of law, rural credit institutions will accelerate restructuring and mergers by establishing municipal-level rural commercial banks, which will help prevent and resolve financial risks, form economies of scale, and improve operational efficiency and service capabilities.

xue hongyan believes that the absorption and merger of rural credit cooperatives has increased the scale of rural commercial banks, expanded their operating areas, and reduced their disadvantages in terms of talent, capital, user base, etc., so that they can better adapt to the requirements of digital transformation and find high-quality loan resources in a larger space. compared with before the merger, they have stronger risk resistance and better development space.

beijing business daily reporter li haiyan