“Investors Network” Meng Xing
On the evening of April 28, administrative penalty information released by the Qingdao Banking Insurance Regulatory Bureau showed that Qingdao Rural Commercial Bank Co., Ltd. (hereinafter referred to as “Qingnong Commercial Bank”, 002958.SZ) committed 5 illegal violations. A total of 31.87 million yuan was forfeited. A total of 31.87 million yuan was forfeited, and a total of 7 responsible persons were given warnings and fines of RMB 610,000 yuan.
According to the administrative penalty decision, Qingnong Commercial Bank has illegal irregularities such as untimely risk classification adjustments for corporate loans, conditions for issuing guaranteed loans to related parties superior to those of similar loans from other borrowers, careless management of working capital loans, and careless post-loan management.
Meanwhile, Qingnong Commercial Bank was also fined 1 million yuan for imprudent credit management in interbank business, etc., and Li Chunlei was given a warning and a fine of 100,000 yuan.
Regarding regulatory penalties, Qingnong Commercial Bank issued an announcement stating that the business related to this penalty mainly occurred before 2020, and most of the issues have been rectified.
In fact, this is not the first time that Qingnong Commercial Bank has received such a large amount of fines. In January 2022, Qingnong Commercial Bank issued an announcement stating that it recently received an administrative penalty decision from the Qingdao Regulatory Bureau, imposing a total of 44.1 million yuan on issues such as inaccurate five-level classification of the bank's loans, inadequate post-investment risk management and control in the investment business, poor management of employee behavior, bank acceptance drafts for loan transfers, lack of effective data governance, misappropriation of liquidity loans, serious carelessness in real estate loan management, and inflow of credit card overdraft funds into non-consumer areas.
The non-performing loan ratio climbed in 2022
Judging from Qingnong Commercial Bank's two fines, the company's loan irregularities are quite serious, and this inevitably has an impact on the quality of the company's assets.
According to the 2022 report disclosed by Qingnong Commercial Bank on April 28, as of December 31, 2022, the bank's non-performing loan balance was 5.260 billion yuan, and the non-performing loan ratio was 2.19%, up 0.45 percentage points from the end of the previous year.
In response, Qingnong Commercial Bank explained that the main reason for the increase in the non-performing loan ratio was that the real estate market and upstream and downstream were still in an adjustment period in 2022, and there was an increase in non-performing loans in the real estate and construction industries.
Furthermore, the company's annual report shows that Qingnong Commercial Bank calculated credit impairment losses of 4.7 billion yuan, an increase of 25.18% over the previous year. Qingnong Commercial Bank said that credit impairment losses for loans issued and advances are the biggest component of credit impairment losses. In 2022, the impairment loss of loans and advance credits calculated by Qingnong Commercial Bank was 4,599 million yuan, an increase of 862 million yuan over the same period of the previous year. The company explained that it was mainly due to Qingnong Commercial Bank's increased efforts to write off and dispose of non-performing assets. At the same time, according to factors such as the market operating environment, it increased provision planning efforts to enhance risk compensation capabilities.
Overall, Qingnong Commercial Bank's 2022 performance was under pressure. The company achieved operating income of 9944 billion yuan, a decrease of 3.43% over the previous year; achieved net profit of 2,346 million yuan, a decrease of 24.11% over the previous year.
Judging from the revenue composition of Qingnong Commercial Bank in 2022, the bank's net interest income last year fell 2.6% year on year to 7.839 billion yuan, and non-interest income fell 6.39% year on year to 2.105 billion yuan.
Regarding the decline in revenue, the company explained that it “further reduced financing costs for the real economy. At the same time, due to the effects of loan repricing and changes in market interest rates, the average yield on loans issued and advances declined compared to the same period last year, and the net interest spread narrowed.” The annual report shows that the bank's net interest spread fell 16 basis points year over year to 2%.
In view of the company's poor performance last year, Qingnong Commercial Bank decided not to pay cash dividends, send shares, or increase share capital.
It is worth noting that this is the first time since its listing in 2019 that Qingnong Commercial Bank has decided not to pay dividends. The company's dividends per share for the first four years were 0.15 yuan, 0.15 yuan, 0.15 yuan, and 0.10 yuan respectively.
Furthermore, in the 2022 annual report, Qingnong Commercial Bank also mentioned that the company's supervisor Sun Congcheng was issued a warning letter last year because his relatives formed short-term transactions, which were recorded in the securities and futures market integrity file.
According to the administrative supervision measures decision issued at the time, Sun Congcheng, as the supervisor of Qingnong Commercial Bank at the time, his daughter Sun Yijia bought 20,000 shares of Qingnong Commercial Bank shares on April 14, 2022, and 2,000 shares of Qingnong Commercial Bank shares on June 27, 2022; Sun Congcheng's father, Sun Siping, sold 160,000 shares of Qingnong Commercial Bank shares on September 6, 2022. The above acts violate the relevant provisions of section 44 of the Securities Law and constitute short-term transactions. The above acts violate the relevant provisions of section 44 of the Securities Law and constitute short-term transactions. According to the provisions of section 170 (2) of the Securities Law, the Qingdao Securities Regulatory Bureau decided to take supervisory measures by issuing warning letters against them and record them in the securities and futures market integrity file.
In fact, prior to that, Qingnong Commercial Bank had also received warning letters from the company's employees' relatives about short-term transactions. In September 2021, Zhu Guangyuan, chief information officer of Qingnong Commercial Bank, received a warning letter from the Qingdao Securities Regulatory Bureau. According to the warning letter, Zhu Guangyuan's father, Zhu Piyu, bought 2,400 shares and 500 shares of Qingnong Commercial Bank shares on June 29 and August 6, 2021, respectively, with a total transaction amount of 12,274 yuan. He also sold 2,900 shares of the company's shares on August 18, 2021, with a transaction amount of 1,1513 yuan.
Loans of nearly 900 million yuan are difficult to recover
On April 28, in addition to publishing the 2022 Annual Report and the 2023 Quarterly Report, Qingnong Commercial Bank also issued two “Notices on Litigation Matters”.
Both of these lawsuits were announced in connection with the bank's Hong Kong Middle Road branch in a financial loan contract dispute between Baron International Construction Group Limited (“Baron Construction”) and Baron International Group Limited (“Baron International”), respectively. According to the announcement, the executor of the application, the Hong Kong Middle Road Branch, applied to the People's Court of Shinan District of Qingdao City for enforcement, which was recently accepted by the court.
According to one of the announcements, the bank applied to the court for enforcement, including requesting Baron Construction to repay the principal amount of the loan of 350 million yuan to the Hong Kong Middle Road Branch, as well as overdue interest and penalty interest totaling about $17.695,700.
According to another announcement, the bank applied to the court for enforcement, including requesting Baron International to repay the principal amount of the loan amount of 526 million yuan to the Hong Kong Middle Road Branch, as well as overdue interest and penalty interest totaling about $247.481 million.
In other words, the principal amount of the 876 million yuan loan issued by Qingnong Commercial Bank to Baron Construction and Baron International cannot be recovered normally.
According to public information, Baron Construction and Ballon International belong to the same “Baron Group” companies. The two companies participate in each other's shares. The group started with clothing and real estate businesses. Its founder Jiang Junping was once the richest man in Qingdao. The layout of “Baron Group” companies covers finance, international trade, platform economy, cold chain, food, apparel, construction and other sectors
Prior to that, Baron Construction and Ballon International had pledged and sold shares of Qingnong Commercial Bank several times, which attracted attention from the outside world at one point.
According to Qingnong Commercial Bank's quarterly report, Baron International and Ballon Construction are the bank's sixth and seventh largest shareholders respectively. As concerted actors, the two hold a total of 7.16% of Qingnong Commercial Bank's shares. In fact, they are the third largest shareholder, after Qingdao Guoxin Group and Qingdao Urban Construction Group. Previously, Baron International and Ballon Construction had passively reduced their shares in Qingnong Commercial Bank several times.
As can be seen from the above table, most of the shares of Qingnong Commercial Bank held by Baron International and Ballon Construction have been plundered, and all 3.11% of Qingnong Commercial Bank's shares held by Baron Construction have been frozen.
In fact, before Qingnong Commercial Bank went public, “Baron” shareholders began pledging the bank's shares to the outside world, and they have always pledged a high percentage. In March 2019, Qingnong Commercial Bank was listed on A-shares. On April 22 of that year, 37.06% of the bank's shares previously pledged by Baron Group to the Qingdao branch of Everbright Bank were unpledged. On April 23, this portion of the shares was pledged to the banks mentioned above for the purpose of financing. Since then, the “Baron System” has continued to change repeatedly between discharging the pledge and the pledge.
Beginning in the second half of 2022, the liquidity risks of “Baron” companies were gradually revealed, and the company and founder Jiang Junping became executees one after another.
Enterprise surveys show that since this year, as of April 26, Jiang Junping has been executed 12 times in a row, with a total execution amount of 1,233 billion yuan.
However, as can be seen from Qingnong Commercial Bank's 2022 report, as of December 31, 2022, Qingnong Commercial Bank had issued loans and advances to the “Baron System” totaling 1,207 million yuan, far higher than the 876 million yuan Qingnong Commercial Bank applied to the court for enforcement. As for the current operating conditions of “Baron”, it is also a question mark as to how Qingnong Commercial Bank can recover its remaining loans on the “Baron Series”.
A relevant person in charge of Qingnong Commercial Bank said earlier, “Shareholders have the right to pledge, transfer, and dispose of their shares according to law. Baron Group's shares were pledged by other financial institutions due to financing needs, and was later sued by other financial institutions due to debt issues, causing the shares to be frozen by the court. This reflects the Baron Group's own operating conditions, which have nothing to do with our business conditions. The loan collateral involved in the lawsuit is relatively adequate, and losses are expected to be small.”
Also, judging from Qingnong Commercial Bank's quarterly report this year, the company's performance has clearly picked up. The bank achieved revenue of 2,672 billion yuan in the first quarter, an increase of 180 million yuan over the previous year, an increase of 7.23%, up 13.6 percentage points from the same period in 2022. Guimu's net profit was 994 million yuan, an increase of 50 million yuan over the previous year, an increase of 5.58%, up 2.5 percentage points from the same period in 2022. The non-performing loan ratio was 2.09%, down 0.1 percentage points from the beginning of the year. (Produced by Thinking Finance) ■