[TechWeb] on January 16th, Bank of Nanjing (601009) issued a supplementary announcement of the resolution announcement of the board of directors, announcing its intention to acquire the controlling stake of SUNING Consumer Finance Co., Ltd. (hereinafter referred to as "SUNING Xiaojin").

On January 14, the Bank of Nanjing held the ninth meeting of the Ninth Board of Directors. The board of directors examined and passed the "motion on the acquisition of controlling shares in financial institutions", which is now supplemented by the main contents of the bill.

According to the official website, SUNING Xiaojin was established with the approval of Bank of China Ltd. Insurance Regulatory Commission and is a non-bank financial institution jointly funded by SUNING (002024), Xiansheng Zaikang Jiangsu Pharmaceutical Co., Ltd., Nanjing Bank, BNP Paribas personal Finance Group (BNP Paribas Personal Finance) and Yanghe shares (002304). The company's initial registered capital is 300 million yuan, with an increase of 300 million yuan in October 2016, with a registered capital of 600 million yuan. Headquartered in Nanjing, the company is a consumer finance company mainly sponsored by Internet retail enterprises. According to APP, Nanjing Bank currently holds 15 per cent of SUNING Xiaojin, ranking fourth among shareholders, while SUNING holds 49 per cent, making it the largest shareholder.

As of June 30, 2021, SUNING Xiaojin has registered capital of 600 million yuan, total assets of 1.115 billion yuan, shareholders' equity of 537 million yuan, operating income of 106 million yuan and net profit of-34 million yuan from January to June 2021.

The Bank of Nanjing said that the company intends to negotiate the equity transfer with some shareholders of SUNING Xiaojin, and if the subsequent transfer is successful, the company is expected to acquire a controlling stake in SUNING Xiaojin.

According to the Daily Business News, the consumer finance license is favored by regional banks, first, because the retail business corresponding to the consumer finance company license can be coordinated and complementary with the bank's own business, which is of great significance for the bank to develop its own retail strategy. Second, because the license of consumer finance company has the qualification of national development industry, which has more advantages than the regional status of regional banks, and can play an important role in the scale expansion of regional banks, especially the head regional banks. As for the Bank of Nanjing, in recent years, the bank has been making continuous efforts to consume financial business.

The Bank of Nanjing also suggested that as of June 30, 2021, SUNING's total assets accounted for 0.07% of the company's total assets, and shareholders' equity accounted for 0.47%. From January to June 2021, SUNING's operating income accounted for 0.52% of the company's operating income and-0.40% of net profit. If the subsequent acquisition is successful, this acquisition has little impact on the operating status of the company.

So far, the counterparty to the acquisition and the proportion of the transaction have not yet been determined, and the company has not yet signed an equity transfer agreement with any shareholders of SUNING Xiaojin, and the acquisition is subject to regulatory approval. There is great uncertainty in the signing and regulatory examination and approval of the agreement, so investors are invited to pay attention to the investment risk.