Gao Yingxin, chairman of the board, said that in terms of financial indicators, Minsheng Bank hopes to achieve steady growth on the basis of stabilization after several years of adjustment, but it is also facing many challenges, with operating income, net interest margin and other indicators under pressure
Text: "Caijing" reporter Chen Hongjie
Editor|Hu Rongping, Zhang Wei
As the first national joint-stock commercial bank established mainly by private enterprises, Minsheng Bank (600016. SH； 01988.HK) The convening of the general meeting of shareholders and the re-election of the board of directors have attracted much attention.
On the afternoon of June 26, 2024, Minsheng Bank held the 2023 Annual General Meeting of Shareholders to elect Gao Yingxin, Wang Xiaoyong and Zhang Juntong as executive directors.
Compared with the previous board of directors, the number of executive directors of Minsheng Bank has increased from one to three. The focus of the market is also the exit of Lu Zhiqiang, chairman of Oceanwide Group, and the entry of Lin Li, chairman of Liye Group.
Among the other non-executive directors, Liu Yonghao, Chairman and President of New Hope Group, Zhang Hongwei, Chairman of the Board of Directors of Oriental Group, Shi Yuzhu, Chairman of Giant Network Group, Song Chunfeng, Managing Director of China Shipowners Mutual Insurance Association, and Zhao Peng, Assistant General Manager and Secretary of the Board of Directors of Dajia Insurance Group, were re-elected.
In addition to the re-election of the board of directors and the board of supervisors, the management of Minsheng Bank also responded to a number of questions raised by investors on June 26, such as financial indicators, asset quality, net interest margin, etc. "After several years of adjustment, our bank hopes to achieve steady growth on the basis of stabilization, but it also faces many challenges. Affected by internal and external factors, operating income, net interest margin and other indicators were under pressure. The management of Minsheng Bank said.
In addition, some shareholders inquired about the related party transactions between Minsheng Bank and Oceanwide and Dongfang. "By the end of last year, the balance of loans to Oceanwide Group was 18.726 billion yuan. The balance of Oriental Group's loans in our bank is 9.889 billion yuan, and the relevant loan guarantee methods are mainly real estate mortgage and equity pledge, and the actual controller and joint and several liability guarantee are also added. The Bank will speed up the tracking and risk mitigation work to maximize the protection of legitimate rights and interests. The management of Minsheng Bank said.
Lu Zhiqiang, Lin Li's retreat and advance
On the evening of June 26, the announcement of the resolution of the 2023 Annual General Meeting of Shareholders announced by Minsheng Bank showed that the proposal to elect Gao Yingxin, Wang Xiaoyong and Zhang Juntong as executive directors was passed; The proposal to elect Zhang Hongwei, Liu Yonghao, Shi Yuzhu, Song Chunfeng, Zhao Peng, Liang Xinjie and Lin Li as non-executive directors was passed; In addition, six independent directors were elected to the ninth session of the Board of Directors.
Unlike the eighth board of directors, the executive directors of the ninth board of directors of Minsheng Bank have added Wang Xiaoyong and Zhang Juntong. According to the data, Wang Xiaoyong will officially become the president of Minsheng Bank from April 2024. From September 2016 to February 2024, he successively served as the President of Chongqing Branch, the General Manager of the Channel and Operation Management Department, and the President of Sichuan Branch, and from June 2006 to September 2016, he successively served as the Assistant General Manager of the Risk Monitoring Department, the Deputy General Manager of the Credit Management Department, the Vice President of the Shandong Branch, and the Vice President of the Gansu Branch of CCB.
It is worth mentioning that Lu Zhiqiang, who has served as the vice chairman of Minsheng Bank for a long time in the past, was not selected for this board of directors. On January 20, 2023, Minsheng Bank disclosed a financial loan dispute with Oceanwide Holdings.
Minsheng Bank announced at the time that the bank's Beijing branch had filed a lawsuit against Wuhan Center Building Development and Investment, Wuhan Central Business District, Oceanwide Holdings and Lu Zhiqiang, which involved a financial loan contract involving an amount of more than 7 billion yuan. Minsheng Bank and Oceanwide Holdings have the same shareholder, Oceanwide Group, and the founder and chairman is Lu Zhiqiang.
On May 10, 2024, Minsheng Bank issued an announcement on litigation matters, stating that the borrowers, Oceanwide Group and Oceanwide Holdings, failed to perform their repayment obligations as agreed in the contract, and the relevant guarantors failed to perform their guarantee obligations. "The principal of the loan is 800 million yuan, 3.071 billion yuan, 395 million yuan, a total of 4.266 billion yuan and 300 million yuan, 300 million yuan, 300 million yuan, 300 million yuan, a total of 1.2 billion yuan and the corresponding interest, penalty interest and compound interest, and all the expenses of realizing the creditor's rights and security rights."
"Although Lu Zhiqiang is the veteran of Minsheng Bank, there has been a large economic dispute between the two sides, and Lu cannot repay it, and it is no longer suitable to be reappointed as a director." Some industry insiders said.
There were early signs of Lu Zhiqiang's exit. In Minsheng Bank's annual evaluation of directors' performance, Lu Zhiqiang was the only director who received the "basic competent" evaluation.
In the re-election of the board of directors, the large number of entrants is also one of the focus of market attention. According to public information, Lin Li was born in Lantang Town, Zijin County, Heyuan City, Guangdong Province, with a doctoral degree. In 1979, he worked as an accountant at the People's Bank of China Guangdong Zijin County Branch, then worked in the local Agricultural Bank of China, and in 1986 he worked in a branch of the Bank of China in Shenzhen.
For example, the establishment of Shenzhen Liye Investment and Development participated in the restructuring of Nanjing Liye Power Transformer; In June 2002, its subsidiary Liye Group acquired 51.79% of the equity of Jiangmen Securities with related parties and changed its name to Hualin Securities; He also won shares in Ping An Insurance, accounting for 2.84% of the total share capital.
On March 25, 2024, the Hurun Research Institute released the "2024 Hurun Global Rich List", and Lin Li ranked 157th on the list with a wealth of 95 billion.
(Source: Minsheng Bank announcement)
Weng Zhenjie and Wu Di were transferred to the board of supervisors
Also on June 26, Minsheng Bank also issued an announcement on the resolution of the first meeting of the ninth board of supervisors, and Yang Yu was the vice chairman of the ninth board of supervisors and the convener of the board of supervisors.
Yang Yu, born in 1964, holds a master's degree in economics and is currently the president of the Beijing branch of Minsheng Bank. He used to be a lecturer at Beijing Institute of Fashion Technology, the director, deputy general manager and deputy general manager of the credit management department of the head office of Minsheng Bank (presiding over the work), the deputy general manager of the Beijing management department, the president of the real estate finance department and the general manager of the investment banking department.
The other five supervisors of Minsheng Bank are: Weng Zhenjie, Wu Di, Lu Zhongnan, Li Yu, and Long Ping. Among them, Weng Zhenjie and Wu Di are non-executive directors from the eighth board of directors.
Weng Zhenjie has a rich resume, spanning multiple financial sub-industries such as banking, trust, and securities. Born in 1962, he is the Chairman of Chongqing International Trust, the Chairman of Guodu Securities, a Director of China Trust Industry Security Fund and a Registered Director of China Trust.
Weng Zhenjie also served as the Chief Executive Officer (CEO) of Chongqing International Trust, Chairman of Yimin Fund Management, Chairman of Southwest Securities, Chairman of Chongqing Three Gorges Bank, Director of Hefei Science and Technology Rural Commercial Bank, Deputy Director of the 10th and 11th Central Financial Commission of China Democratic National Construction Association, and Deputy General Manager of Beijing Zhongguancun Science and Technology Development (Holdings).
Wu Di also has a number of titles, including Chairman and President of Fuxin Group, Director of Hangzhou United Rural Commercial Bank and Chairman and Executive Director of Datang Group; Deputy to the Fujian Provincial People's Congress, Vice President of the Fujian Federation of Industry and Commerce (General Chamber of Commerce), Honorary Vice President of the Fujian Guangcai Program Promotion Association, Honorary President of the Fujian Private Enterprise Chamber of Commerce, Member of the Xiamen Municipal Committee of the Chinese People's Political Consultative Conference, Vice Chairman of the Xiamen Municipal Committee of the China Democratic National Construction Association, Honorary President of the Xiamen Chamber of Commerce in Shanghai, President of the Liaoning Chamber of Commerce in Fujian Province, Executive Director of Jimei University, etc.
In addition, Zhang Juntong, the former chairman of the board of supervisors of Minsheng Bank, is now an executive director. According to public information, he was born in 1974 and served as the chairman of the board of supervisors, employee supervisor, chairman of the supervisory committee of the board of supervisors, and member of the nomination and evaluation committee of Minsheng Bank from 2017 to 2024. Since May 2024, he has served as the Vice President of Minsheng Bank, holding 150,000 A-shares (RMB ordinary shares) and 200,000 H-shares (shares of Chinese-funded enterprises registered in the mainland and listed in Hong Kong).
Financial indicators remain challenging, and related-party transactions are in the spotlight
As the country's first private bank, Minsheng Bank has made good achievements, but it has faced some problems in recent years. Gao Yingxin, chairman of the board, said that in terms of financial indicators, Minsheng Bank hopes to achieve steady growth on the basis of stabilization after several years of adjustment, but it is also facing many challenges, with operating income, net interest margin and other indicators under pressure.
According to the data, in 2023, Minsheng Bank will achieve operating income of 140.817 billion yuan, a decrease of 1.16%; In 2022, the operating income will be 142.476 billion yuan, a year-on-year decrease of 15.60%; In 2021, the operating income of Minsheng Bank was 168.804 billion yuan, a decrease of 8.73%.
Minsheng Bank said that the main reasons are: on the asset side, affected by the reduction of loan interest rates and the low operation of market interest rates, the yield on loans and investment has declined, and at the same time, the growth of high-yield retail loans has slowed down due to insufficient consumption, which has weakened the effect on the improvement of asset returns; On the liability side, the cost of debt still showed a slight upward trend due to the impact of deposit regularization and US dollar interest rate hikes.
In terms of net interest margin, Minsheng Bank's value for many years has been lower than the average of the banking industry. At the end of the first quarter of 2024, the bank's net interest margin was 1.38% and that of commercial banks was 1.54%.
(Source: Enterprise Early Warning)
In the view of Li Bin, vice president of Minsheng Bank, the bank has accelerated structural adjustment in operation, significantly reduced the investment in high-risk non-standard assets, increased the proportion of assets with higher credit ratings, and the decline in asset income in stages exceeded that of peers.
"We will take the control of deposit costs as the starting point, first, we will continue to consolidate the foundation of deposit establishment, and steadily reduce the cost of debt by doing a good job in basic customers and basic services. The second is to adjust the deposit structure, vigorously develop the payment of wages and payment and settlement business, and expand the stable source of low-cost settlement deposits. The third is to strengthen assessment and guidance, and promote the reduction of high-cost deposits. Li Bin said.
Asset quality is the lifeblood of a bank. In the past three years, although the non-performing ratio of Minsheng Bank has been declining, it is still at the upper level of its peers. As of the end of the first quarter of 2024, the NPL ratio of Minsheng Bank was 1.44%, that of China Merchants Bank was 0.92%, that of Industrial Bank was 1.07%, and that of Ping An Bank was 1.07%.
"In three years, the cumulative collection and disposal of non-performing assets is close to 400 billion yuan." Huang Hongri, vice president of Minsheng Bank, said that at present, historical risk assets are basically cleared, but there are still a small number of leftovers, and at the same time, some of the downgraded non-performing loans are formed for complex reasons, and it is difficult to dispose of them, and it will take time to gradually solve them. Affected by the risks of the real estate industry, the banking industry is generally facing risk pressure, and the bank's loans to public real estate also have certain risks.
For the loans of Oceanwide and other shareholders, Huang Hongri said that by the end of 2023, the balance of loans to Oceanwide Group will be 18.726 billion yuan, and the resolution of debt risks of Oceanwide Group will be accelerated to maximize the protection of legitimate rights and interests. The balance of Oriental Group's loans to Minsheng Bank was 9.889 billion yuan.
"We continued to reduce credit exposure, and dynamically assessed impairment provisions to accelerate asset disposal. At present, the relevant loans account for a relatively small proportion of Minsheng Bank's overall loans, and provisions have been made in combination with the project risk situation, which has a limited impact on the bank's operation and development. Huang Hongri said.