Guangzhou agricultural and commercial bank's performance in 2023 "double decline", the former president was investigated and attracted marke

On March 28, Guangzhou Rural Commercial Bank Co., Ltd. (01551. HK, hereinafter referred to as "Guangzhou agricultural and commercial bank") announced its 2023 annual report. During the reporting period, Guangzhou agricultural and Commercial Bank realized business income of 18.154 billion yuan, a decrease of 19.47% over the same period last year; Net profit was 3.26 billion yuan, down 19.27% year-on-year.
In terms of asset quality, by the end of 2023, the non-performing loan ratio was 1.87%, down from 2.25% in the first half of the year and 0.24 percentage points from the end of 2022. The provision coverage rate was 164.63%, up from 158.03% in the first half of the year. Overall, Guangzhou agricultural and commercial bank has made efforts in asset quality, reversing the momentum of rising non-performing rate for four consecutive years.
It is noteworthy that on March 19, Yi Xuefei, the former head of Guangzhou agricultural and commercial bank, was under investigation by Guangzhou Discipline Inspection Commission on suspicion of serious violations of discipline and law. Prior to this, the management of Guangzhou agricultural and commercial bank has fallen one after another on suspicion of taking bribes in the past five years.
Yi Xuefei's investigation has cast a shadow on Guangzhou agricultural and commercial bank, which is already "under great pressure".
Asset quality has improved significantly
The annual report shows that during the reporting period, the non-performing loan rate of Guangzhou agricultural and commercial bank was 1.87%, down 0.24 percentage points from the end of last year, ending the upward trend of non-performing rate for four consecutive years. The provision coverage rate increased to 164.63%, up 7.7 percentage points from the end of last year.
In response, Guangzhou agricultural and Commercial Bank responded that due to the global economic downturn in recent years, domestic economic development is facing triple pressures of demand contraction, supply shocks and expected weakening, superimposed on the impact of the epidemic, resulting in a downturn in service consumption, difficulties in the operation of leasing and business services enterprises, sales of real estate enterprises falling short of expectations, and the general liquidity of enterprises continues to be under pressure, which leads to credit risks. Affected by this, the non-performing rate of Guangzhou agricultural and commercial bank continued to rise from 2019 to 2022.
In 2023, the bank focused on the disposal of risky assets and took various measures to resolve risks. Specific measures include promoting the investment of various businesses, establishing a pre access mechanism for large-scale credit, strengthening post loan management and risk early warning, formulating a "one household, one policy" disposal and resolution plan for risky businesses, and increasing the collection and disposal of non-performing assets.
In terms of capital replenishment, by the end of 2023, the capital adequacy ratio of Guangzhou agricultural and commercial bank was 13.67%, up 1.08 percentage points from the end of last year, and the core primary capital adequacy ratio was 9.83%, up 0.62 percentage points from the end of last year.
During the reporting period, Guangzhou agricultural and Commercial Bank completed the issuance of 550 million H shares and 2.409 billion domestic shares, raising a net capital of about 6.433 billion yuan, all of which were used to supplement core tier 1 capital; In addition, 15 billion yuan of secondary capital bonds were issued and listed, and all the funds raised were used to supplement secondary capital after deducting issuance expenses.
In terms of asset size, by the end of 2023, the total assets of Guangzhou agricultural and commercial bank were 1314.042 billion yuan, an increase of 6.53% over the end of last year; Total loans increased by 39.346 billion yuan, an increase of 5.69% over the end of last year; The total amount of customer deposits was 947.186 billion yuan, an increase of 36.701 billion yuan, an increase of 4.03% over the end of last year.
Top leaders fall one after another
In fact, since the investigation of Wang Jikang, the former chairman, the management of Guangzhou agricultural and commercial bank has been in turmoil.
In August 2019, the Guangzhou Municipal Commission for Discipline Inspection and Supervision issued a notice that Wang Jikang, former party secretary and chairman of Guangzhou agricultural and commercial bank, was subject to disciplinary review and supervision and investigation. It was less than a month after Wang Jikang resigned as chairman of Guangzhou agricultural and commercial bank.
In April 2020, the Guangzhou Municipal People's Procuratorate prosecuted Wang Jikang to the Guangzhou intermediate people's Court on suspicion of taking bribes according to law. Wang Jikang was suspected of taking advantage of his position to seek benefits for others and accepting money and goods from others together or separately, equivalent to 285 million yuan.
Wang Jikang's fall touched his whole body.
In March 2020, Chen Qianhong, former business director of Guangzhou agricultural and commercial bank, was submitted to Guangzhou Municipal People's Procuratorate for prosecution on suspicion of taking bribes; In April of the same year, Wu Haifeng, former assistant governor of Guangzhou agricultural and commercial bank, was indicted on suspicion of taking and offering bribes; In July of the same year, Peng Zhijun, former vice president and chief risk officer of Guangzhou agricultural and commercial bank, was arrested on suspicion of taking bribes; In October of the same year, Li Fangjin, non-executive director of Guangzhou agricultural and commercial bank, was investigated.
In March this year, Yi Xuefei was investigated by the Guangzhou Municipal Commission for Discipline Inspection on suspicion of serious violations of discipline and law. At this time, Yi Xuefei had left his post as president of Guangzhou agricultural and commercial bank for nearly a year due to the expiration of his post.
It is worth mentioning that Yi Xuefei has worked in Guangzhou agricultural and commercial bank for ten years and was once Wang Jikang's "old subordinate". The two have worked together for more than ten years. As for the investigation of Yi Xuefei, Guangzhou agricultural and commercial bank said that Yi Xuefei's case was a personal event, and he was transferred from Guangzhou agricultural and commercial bank in early 2023, which has been more than a year.
Millions of Yuan fined for violations
On January 8, Tianhe branch of Guangzhou agricultural and commercial bank was fined 1.25 million yuan for serious violations of prudent operating rules in bank acceptance bill business, and two relevant responsible persons were warned at the same time. This is also the first "million fine" issued by the Guangdong regulatory bureau of the General Administration of financial supervision this year.
On the same day, Haizhu branch of Guangzhou agricultural and commercial bank was fined 400000 yuan for serious violations of prudent business rules in post loan management, and two relevant responsible persons were also warned.
This is not the first time that Guangzhou agricultural and commercial bank has received a large fine. In June 2022, the bank was fined 2.329 million yuan for violating six financial laws and regulations. At the same time, Li Xuedong, then the compliance and risk director of the credit card center of Guangzhou agricultural and commercial bank, was mainly responsible for violations of laws and regulations and was fined 10000 yuan.
In March of the same year, Guangzhou agricultural and commercial bank was fined 5.9 million yuan for violating the relevant provisions of "anti money laundering", ranking first among agricultural and commercial banks. Specific illegal operations include failing to fulfill the obligation of customer identification in accordance with the regulations, failing to submit large transaction reports or suspicious transaction reports in accordance with the regulations, and transactions with unidentified customers.
After Yi Xuefei left office, Guangzhou agricultural and Commercial Bank ushered in a female president. In November 2023, Deng Xiaoyun was hired as the new president of Guangzhou agricultural and commercial bank to steer the trillion level agricultural and commercial bank.