Caixin Media reported on November 5th (Reporter Peng Kefeng) For the long-term unattended small and medium-sized bank equities, it may be a good choice for them to be taken over by local state-owned assets.

On November 5th, listed company Zhejiang Orient Financial Holdings Group Co., Ltd. (referred to as Zhejiang Orient) announced that it has won the auction of 1.65% equity of Hangzhou United Rural Commercial Bank Co., Ltd. (referred to as Hangzhou United Bank) through public bidding and other means (totaling 36,015,939 shares). It is worth noting that the previous multiple equity auctions of Hangzhou United Bank fell through due to lack of interest.

An industry analyst from Caixin Media told reporters that the cooling off of small and medium-sized bank equity auctions in recent years is not uncommon. The core reason is that many small and medium-sized banks face operational pressures and strict supervision by regulatory authorities towards bank shareholders. Overall, the transfer of equity of regional banks by local state-owned assets to promote their healthy development is a good choice. Of course, the equity transactions of small and medium-sized banks still need to adhere to market-oriented and legal principles.

Board of directors' resolution less than a month ago: Zhejiang Orient acquires 1.65% stake in Hangzhou United Bankshares

While confirming the acquisition of the stake in Hangzhou United Bankshares, Zhejiang Orient also stated in the announcement that the company's management will continue to implement this acquisition through public auctions, agreement transfers, etc., within the scope authorized by the shareholders' meeting. The final proportion of the shares acquired is uncertain. The company will fulfill its disclosure obligations in a timely manner based on the progress of subsequent transactions. Please be aware of investment risks.

Investigations by reporters found that Zhejiang Orient was well prepared for this equity transaction. On October 11, 2024, and October 28, 2024, Zhejiang Orient respectively held the third meeting of the tenth board of directors and the third extraordinary general meeting of shareholders in 2024 to deliberate and approve the "Resolution on the Company's Investment in Acquiring Bank Shares".

The specific content of the relevant resolution is as follows: Zhejiang Orient will use its own funds to acquire the shares of Hangzhou United Bankshares totaling up to 3.94% by December 31, 2024, based on an evaluation result not exceeding the requirements of national asset supervision. The acquisition methods include but are not limited to public auctions, agreement transfers, etc. At the same time, Zhejiang Orient plans to become a shareholder of Hangzhou United Bankshares.

It can be seen from the comparison of the 1.65% stake acquired this time and the previously announced acquisition target of approximately 3.94% stake that Zhejiang Orient's goal in this acquisition action is only to complete less than half.

According to public information, Zhejiang Orient is a core enterprise under Zhejiang Province International Trade Group Co., Ltd., a subsidiary of Zhejiang Provincial State-owned Assets Supervision and Administration Commission, which was listed on the Shanghai Stock Exchange in 1997. Currently, the company has various financial businesses including trust (Zhejiang Gold Trust), futures (Datang Futures), insurance (China-Korea Life), financial leasing (Guojin Leasing), fund investment and management (Oriental Chanrong, etc.), wealth management, and more.

Regarding the purpose of purchasing shares of Hangzhou United Bank and investing in the company, Zhejiang Orient stated that the transaction aligns with the company's strategic plan, enhances the synergy of financial resources, improves core competitiveness, and strengthens the financial control platform.

Hangzhou United Bank, one of the "Banker" top 1000 banks, has had its equity go through three auctions but remained unsold.

According to information from the Hangzhou United Bank official website, the bank was restructured from Hangzhou City Rural Credit Cooperatives Union and its 23 affiliated credit cooperatives to a rural commercial bank, and later from a rural commercial bank to an urban commercial bank in 2011. It currently has a registered capital of 2.18 billion yuan, 137 business outlets, and over 3000 employees. As of the end of September 2024, Hangzhou United Bank Group's total assets exceeded 547.6 billion yuan, with various deposit balances surpassing 405.7 billion yuan and various loan balances exceeding 354.8 billion yuan. Additionally, according to the official website, Hangzhou United Bank ranks 308th in the global ranking of the "Banker" in the UK, consistently among the top 400 for 8 consecutive years.

According to data from QiQiCha, the ownership of the bank is relatively dispersed, with the largest and second-largest shareholders being non-employee natural person shareholders and employee natural person shareholders, while Hangzhou Financial Investment Group Co., Ltd. is the third-largest shareholder.

Finance Linked reporters found that multiple equity shares of Hangzhou United Bank have already landed on various major judicial auction platforms this year, but the results have not been satisfactory. On August 5, 2024, Beijing Tianrui Xiaguang Technology Development Co., Ltd. held 31.993 million shares of Hangzhou United Rural Commercial Bank, which ended without any bids after the official auction started, marking the third time this equity share has failed to sell. On July 18 and July 27, 2024, Beijing Tianrui Xiaguang's holding has been auctioned twice with starting prices of 0.313 billion yuan and 2.82 billion yuan, but no buyers were found. The starting price for the third auction was reduced to 0.256 billion yuan but still ended empty. At the same time, the Alibaba judicial auction platform also has several small shareholders holding shares of Hangzhou United Bank up for sale. Among them, Jin Du Property Group holds 5.3681 million shares of shares, divided into 15 lots for auction, but no bids were made for a long time.

From an industry perspective, so far this year, on the Alibaba judicial auction platform alone, there have been as many as three to four thousand auction information related to bank equity, mostly involving small and medium-sized banks, but the transaction situation is not optimistic. Even for well-known regional banks like Huishang Bank, many of their equity shares remain unsold after multiple auctions.