Due to the large number of star corporate shareholders, the shareholders' meeting and the re-election of the board of directors of Minsheng Bank have always attracted much attention.
On June 26, 2024, the new general meeting of shareholders of Minsheng Bank was held as scheduled. With the announcement of the resolution of the general meeting of shareholders of the bank in the evening of the same day, the list of the new board of directors of the bank was born.
Researchers at the Southern Weekend New Finance Research Center compared the list of directors with those of the previous board and found that the number of executive directors has increased from one to three. Among them, Chairman Gao Yingxin remains unchanged, and the new seats are President Wang Xiaoyong and Vice President Zhang Juntong. On the evening of the same day, the announcement of the resolution of the first meeting of the ninth board of directors of Minsheng Bank showed that Gao Yingxin was elected as chairman, and Zhang Hongwei, Liu Yonghao and Wang Xiaoyong were elected as vice chairmen.
The most obvious thing is that after the replacement of the old and the new board of directors, Lu Zhiqiang, the former richest man in Shandong and the vice chairman of the eighth board of directors since the establishment of the bank, and the head of the "Oceanwide Department" (referring to China Oceanwide Holdings Group Co., Ltd. and its affiliates, the same below), officially withdrew. Instead, there are many former richest people in Shenzhen who have hunted the financial market many times and their net worth has skyrocketed. However, Lin Li's qualifications as a director are subject to the approval of financial regulators.
A banking veteran told a researcher at the Southern Weekend New Finance Research Center that as one of the founders of Minsheng Bank, Lu Zhiqiang's resignation from the board of directors of Minsheng Bank means that the era of the banking industry's reliance on real estate to expand its balance sheet has come to an end. Under the new economic cycle, how to better grasp its own advantages and seek accurate positioning in the cramped market environment is an unavoidable proposition of the times in front of the management of Minsheng Bank.
Lu Zhiqiang is out, and Oceanwide is still involved in many aspects of Minsheng Bank
The Southern Weekend New Finance Research Center compared the new announcement and past information and found that after the change, the board of directors of Minsheng Bank was reduced from the previous 18 to 16. While Lin Li and Lu Zhiqiang were "one in and one out", private entrepreneurs Zhang Hongwei, Liu Yonghao and Shi Yuzhu continued to stay in office.
Although Lu Zhiqiang was "elected" to the board of directors because he was not previously nominated, his company is still a major shareholder of Minsheng Bank, but it is lower than Lin Li's company. According to the financial report of Minsheng Bank in the first quarter of 2024, China Oceanwide Holdings Group Co., Ltd. (hereinafter referred to as "Oceanwide Holdings") controlled by Lu Zhiqiang and Shenzhen Liye Group Co., Ltd. (hereinafter referred to as "Liye Group") led by Lin Li hold 4.12% and 4.49% of the shares of Minsheng Bank respectively, ranking the seventh and fourth largest shareholders of Minsheng Bank, respectively. If we look at it from a longer time frame, Oceanwide Holdings and Shenzhen Liye have reduced their holdings of Minsheng Bank in the fourth quarter of 2021 and the first quarter of 2024 respectively. It can be seen that Lin Li and his Liye Group have long planned for the decision to enter the board of directors of Minsheng.
In contrast, Lu Zhiqiang's exit this time is a bit sad. A person close to Minsheng Bank told a researcher at the Southern Weekly New Finance Research Center that as one of the founders of Minsheng Bank, Lu Zhiqiang is now in such a difficult position. In the era when the saying that "real estate is naturally finance" prevailed, Lu Zhiqiang's "Oceanwide Department" took real estate as its main business and borrowed a large amount from Minsheng Bank with the convenience of shareholders. In the real estate upward cycle, banks and real estate companies have made a lot of money; When the cycle turns downward, this win-win pattern becomes a backlash between real estate and banks. This is naturally a situation that neither partner wants to see.
In the exchange session of the shareholders' meeting on June 26, small and medium-sized shareholders expressed concern about related party transactions such as Oceanwide. Huang Hongri, vice president of Minsheng Bank, responded that he would speed up the tracking of the resolution of the debt risk of Oceanwide Group and maximize the protection of the bank's legitimate rights and interests.
Closely linked to the huge lawsuit is Lu Zhiqiang's embarrassing situation on the board of directors of Minsheng Bank. According to a recent evaluation of board members released by Minsheng Bank, members of the bank's board of supervisors evaluated Lu Zhiqiang's performance in 2023 as "basically competent", in stark contrast to the "competent" of the other 17 members.
Commenting on the results of this evaluation, the above-mentioned bank veteran explained to a researcher at the Southern Weekend New Finance Research Center that according to the Measures for the Evaluation of the Performance of Duties by Directors and Supervisors of Banking and Insurance Institutions (Trial) (hereinafter referred to as the "Measures") issued by the former China Banking and Insurance Regulatory Commission, the evaluation grades of directors, supervisors and senior executives in the banking industry are divided into three categories: "competent", "basically competent" and "incompetent". The Measures clearly stipulate the application and inapplicability of "incompetent" and "competent" respectively, but do not stipulate the applicable circumstances of "basic competence". Some market comments pointed out that Minsheng Bank's evaluation of Lu Zhiqiang saved some face for this veteran. After all, there have been precedents for bank directors, supervisors and senior executives to be rated as "incompetent". In contrast, the interests of the "Oceanwide Department" represented by Lu are so entangled with Minsheng Bank that the outside world will not be surprised even if it is evaluated as "incompetent".
The Southern Weekend New Finance Research Center reviewed the relevant administrative measures and found that the applicable circumstances of "incompetence" stipulated in the relevant measures include eight items, such as leaking secrets and harming the legitimate rights and interests of banking and insurance institutions. There are 10 circumstances that should not be rated as competent, including "serious violations in the management of equity and related party transactions, major deviations in business strategies, and major failures in risk management policies". The board of directors and the board of supervisors of banking and insurance institutions shall hold directors and supervisors accountable to those who are rated as "incompetent".
Lin Li was selected, and the capital catcher hunted the financial market many times
Who are the new entrants? What is the background of the Liye Group he is in charge of?
According to a number of public information researched by the Southern Weekend New Financial Research Center, Lin Li, born in 1963, was a supervisor of Ping An Insurance (Group) Co., Ltd., the chief auditor and accounting section chief of the Shenzhen Shangbu Branch of the Bank of China, the president of the Shenzhen Binhe Branch of the Bank of China, the manager of the finance department of the Shenzhen China Trading Company, the accountant of the Zijin County Branch of the Agricultural Bank of China, and the loan officer of the Zijin County Branch of the People's Bank of China. This resume shows that Lin Li is quite familiar with the business of commercial banking.
In the early 90s of last century, Lin Li earned his first pot of gold by acquiring a large number of original shares of "Shenzhen Development", and started his investment and entrepreneurial journey. Subsequently, in 2000, it acquired Jiangmen Securities (now renamed as "Hualin Securities"), and in 2003, it acquired the equity of Ping An Insurance Group of China (hereinafter referred to as "Ping An Insurance"), accounting for 51% and 3.6% of the shares of the first two, respectively, involving 29 million yuan and 520 million yuan. From the perspective of investment timing, these two investments occurred when the target of the acquisition fell into certain business difficulties: Jiangmen Securities fell into continuous losses, and Ping An Insurance fell into performance decline and brand difficulties due to investment-linked insurance incidents. This is similar to the current situation of Minsheng Bank. In 2007, Ping An Insurance was listed on the A-share market, and Lin Li's personal wealth soared to 14 billion yuan, ranking 41st on the "Hurun Report", surpassing Ma Huateng to become the richest man in New Shenzhen. The above series of information can be judged that Lin Li, who has invested in the financial market many times and has benefited extraordinarily, is an out-and-out capital tycoon, and is good at making investments that are contrary to the public's judgment.
While reaping a large amount of money through investment, Lin Li plans and practices the enterprise map of "industry + finance". Researchers at the Southern Weekend New Finance Research Center learned through research and investigation of the shareholding structure chart and other sources that Lin Li now holds 99.9% of the shares of Liye Group. The latter was established in 1995 with a registered capital of 10 billion yuan, and is a private enterprise with a business model of "industry + finance". From the perspective of the enterprise map, Liye Group now holds about 65% of the shares of Hualin Securities, and has also been involved in three village and township bank investments, with a shareholding ratio of about 10%, and the targets are all located in Guangxi. Liye Group's "love" for the financial industry can be seen from this. As for the investment in Minsheng Bank, Lin Li's enterprising spirit is even more obvious. After appearing in the list of the top 10 outstanding shareholders for the first time at the end of the third quarter of 2023, Liye Group increased its holdings in the first quarter of 2024, reaching 4.49% of the shares, becoming the fourth largest shareholder of the bank.
In addition to the financial investment in the "one body, two wings", the industrial layout shown on the official website of Liye Group is involved in the fields of new energy, lithium energy and biomedicine. Because it has not released the information in its annual report, the Southern Weekly New Finance Research Center has no way to analyze its business conditions. However, a researcher from the Southern Weekend New Finance Research Center investigated a number of announcements of Hualin Securities, a subsidiary of Linli Group, and found that since 2024, Liye Group has pledged its shares in Hualin Securities 10 times for financing, all for "its own business development". Hualin Securities announced on June 13 that as of that day, the pledged shares of Liye Group accounted for nearly 50% of its shares, accounting for more than 30% of the total shares of Hualin Securities. The series of information shows that the shares of Hualin Securities are one of the financing tools commonly used by Liye Group.
The above-mentioned banking veteran told a researcher at the New Finance Research Center of Southern Weekend that frequent financing may mean that the company's main business income is limited, or its investment behavior is active. The first quarter report of Minsheng Bank in 2024 also shows that at the end of the current period, about 1.4 billion shares of Minsheng Bank held by Liye Group were pledged, accounting for more than 70% of the total shares of the bank held by it. In connection with this, in the same report, in response to the criticism from the outside world that the company's equity pledge ratio is too high, Minsheng Bank made a response of "coordinating the reduction of the equity pledge ratio".
Under such circumstances, with the blessing of Lin Li, who is a member of the board of directors of Minsheng Bank, whether the Liye Group, which is actually controlled, will raise a large amount of financing by pledging the equity of Minsheng Bank in the future, may be one of the focuses worth paying attention to.
A number of indicators are not good, and the bad ones are still in the liquidation period
Putting aside the tragic and joyful narrative behind the change of decision-making, how Minsheng Bank, which is inferior to its peers in many indicators, may be the fundamental thing to do.
As of the first quarter of 2024, Minsheng Bank's operating income, net profit, net interest margin, non-performing loan ratio and other indicators ranked behind the nine A-share listed joint-stock banks.
In the first quarter of 2024, Minsheng Bank achieved an operating income of 34.273 billion yuan, ranking 7th among the 9 listed banks, only higher than Huaxia Bank and Zheshang Bank, far from the first-ranked China Merchants Bank (86.417 billion yuan), and there is also a large gap with the average level of about 43.5 billion yuan of the 9 banks. It is also lower than the industry average of 1.54% announced by the State Administration of Financial Supervision and Administration.
In terms of net profit attributable to the parent company, Minsheng Bank ranked 6th, with 13.4 billion yuan, which is far from the average level of 16.8 billion yuan of 9 listed banks. The level of non-interest income such as intermediate fees also lags behind that of its brothers.
In other words, compared with its joint-stock banks, Minsheng Bank's overall performance is not good. Whether it is the deposit and loan business corresponding to net interest income, or the wealth management and other middle-income business corresponding to non-interest income, Minsheng Bank is lackluster.
In terms of longitudinal comparison, from 2020 to 2023, Minsheng Bank's revenue has entered a downward channel. Under the circumstance that the provision for credit impairment losses decreased, the net profit of Minsheng Bank increased slightly, but the characteristics of provision to feed back profit were more obvious. In the absolute value of revenue, Minsheng Bank's 2023 level is almost the same as that of 2014.
In addition to the lack of bright spots in operation, the non-performing assets left over from the aggressive development of real estate business of Minsheng Bank in the past have also attracted attention from the industry. According to a survey conducted by the Southern Weekend New Finance Research Center, the bank's non-performing loan ratio in the real estate sector soared to 4.92% by the end of 2023, up from 0.69% in 2020. At the same time, the proportion of real estate loans showed a downward trend, from about 11% in 2020 to less than 8%. This shows that the bank is still in the stage of clearing non-performing real estate loans. The above-mentioned banking veteran told a researcher at the Southern Weekly New Finance Research Center that the disposal cycle of real estate is usually relatively long because of the large amount of the target. Coupled with the impact of the market atmosphere of "buying up, not buying down", the length of the disposal cycle is difficult to predict.
An insider of Minsheng Bank told a researcher at the New Finance Research Center of Southern Weekend that in fact, as early as 2020, when Chairman Gao Yingxin took office, Minsheng Bank began to shrink the real estate business that it had been keen on. To a certain extent, Gao Yingxin's arrival prevented Minsheng Bank from falling into a bigger real estate crisis to a certain extent. In early 2024, Gao Yingxin's public writing in China Finance magazine showed that mitigating risks and strengthening comprehensive risk management remain key tasks for Minsheng Bank. It can be judged from this that four years have passed, and Minsheng Bank has not completely got rid of the burden of real estate non-performing assets.
There are four questions to be solved by management
Has Minsheng Bank reached a difficult situation? After the completion of the board of directors, what problems does the new management team of Minsheng Bank need to solve?
The above-mentioned banking veteran told a researcher at the Southern Weekend New Finance Research Center that the narrowing of interest rate spreads and the decline in intermediary business income due to capital market fluctuations are the common situation faced by the banking industry in recent years. Minsheng Bank's poor performance is related to its aggressive expansion of its real estate business in the past, but this is a historical problem. Minsheng Bank's fundamental problems are not as serious as the outside world imagined. Otherwise, there will be no situation where shareholders actively increase their holdings.
In a research report released by China International Capital Corporation Limited (CICC) at the end of 2023, Minsheng Bank also gave Minsheng Bank an "outperform" rating on the grounds of "strong risk management, internal control and compliance capabilities, and improved quality" and "active disposal of existing risks". The industry's negative evaluation of Minsheng Bank mostly focuses on its past behavior, and affirms its positive attitude towards dealing with problems left over from history.
The above-mentioned Minsheng Bank insiders also told researchers at the Southern Weekend New Finance Research Center that since Gao Yingxin's appointment, Minsheng Bank has undergone great changes in terms of business lines and internal reforms. One of the most obvious is that the reform of the compensation system has shifted away from the previous performance-oriented approach to the implementation of a customer service-centric professional sequence reform. After the completion of the re-election of the board of directors and the appointment of President Wang Xiaoyong in March, the decision-making level of the new "directors, supervisors and senior executives" (board of directors, board of supervisors and senior management) of Minsheng Bank was officially finalized. The new management will certainly take advantage of the trend of "three fires for new officials to take office" and "make a difference."
According to the New Finance Research Center of Southern Weekly, in order to seek breakthroughs in operational and internal risk control, Minsheng Bank should start to improve in the following aspects. The first is the narrowing of interest rate spreads that the banking industry is generally facing. Data for the first quarter of 2024 shows that Minsheng Bank lags significantly behind its peers in this ranking. Minsheng Bank should improve its asset-liability structure and corresponding costs by actively adjusting its asset-liability structure and corresponding costs, and strengthen its investment capabilities in the financial market. Second, strengthen the disposal of non-performing assets in real estate, strive to clear non-performing assets as soon as possible, reduce the pressure of continuous decline in the provision coverage ratio, and enhance risk tolerance; Third, strengthen the rectification of internal control and compliance, and improve its image as soon as possible of a large number of fines and frequent illegal business practices in the industry; Fourth, in the increasingly fierce competition in the same industry, we should find out our own precise positioning, expand and strengthen our characteristic business, and hope to show a new style under the leadership of the new leadership team.
(Assistant Researcher Wang Yiquan and Wang Siyuan also contributed to this article)
Chen Yan, researcher at the New Finance Research Center of Southern Weekly, and Jin Yahan, assistant researcher
Editor-in-charge: Fengyu