On June 18, Kashi bank announced that, under the guidance of the regulatory department window, it was required to distribute 0.8 yuan (before tax) of undistributed profits to shareholders for every 10 shares in accordance with the principle of less dividend and more retention.
Compared with the dividend plan approved by the shareholders meeting of Kashi bank, the cash dividend of the new plan is reduced by 20%.
In this regard, a number of interviewees told the securities companys Chinese reporters that it is rare to adjust the dividend plan that has been approved by the general meeting of shareholders.
Supervision department window guides less dividend and more retention
Recently, the bank received a telephone notice from the insurance regulatory bureau of Kashi bank. According to the guidance of the window and the principle of less dividend and more retention, the Bureau asked Kashi bank to distribute 0.8 yuan (for) per 10 shares to all shareholders with undistributed profits.
The bank said that in order to meet the needs of long-term development and properly handle the relationship between business growth, profit distribution and capital replenishment, it will distribute its rights and interests in accordance with the opinions of Kashi banking regulatory bureau.
Prior to this, Kashi bank disclosed the annual equity distribution plan as follows: distribute 1 yuan (including tax) of cash dividend to all shareholders for every 10 shares with undistributed profits. The plan was approved by the board of directors at the end of April and passed by the general meeting of shareholders on May 22.
This also means that the dividend plan that has been deliberated and approved by the general meeting of shareholders of the bank will be modified according to the regulatory requirements. Compared with the original plan, the actual cash dividend scale of the bank will be reduced by 20%, and the proportion of cash dividend will also be reduced from 32.23% to 25.78%.
In addition, in the 2018 profit distribution plan disclosed in April last year, Kashi bank also said that it would not carry out annual share bonus in accordance with the principle of less dividend and more retention by the regulatory authorities.
Interviewees said rare
Many interviewees were puzzled by Kashi banks temporary adjustment of its annual profit distribution plan.
According to the person in charge, from the perspective of the regulatory authorities, commercial banks should better play the role of social credit creation, which requires banks to have certain capital to increase investment and support the real economy more. In the case that capital supplement channels (especially core tier one capital) are not unblocked, reducing dividends and increasing profit retention are the main choices. However, from the perspective of shareholders, all of them must be I hope the bank will pay more dividends.
Another secretary of the board of directors of a listed bank also said that Kashi bank and the regulatory authorities obviously did not communicate in place.
There is another possibility that the regulatory authorities have a say in advance, but if the bank does not implement the regulatory provisions and passes the deliberation of the general meeting of shareholders first, the regulatory authorities will certainly not agree with it.
At the same time, the interviewees did not question the rationality of the window guidance of the local banking and Insurance Regulatory Bureau for Kashi bank to reduce the dividend.
In the case of increased liquidity pressure and debt pressure, and unclear asset quality and potential risks, some small banks should not pay dividends. In the current environment, its impossible for such a bank with weak anti risk ability to make efforts to pay dividends. Analysts at a large brokerage bank said.
Previous equity change and senior management qualification denied
Kashi bank, formerly Kashi rural credit cooperatives, was restructured into an agricultural commercial bank in July 2014 and became the first agricultural commercial bank to list the new third board in May 2017.
By the end of last year, the bank had a total share capital of 507 million shares, of which Xinjiang Jintou, a subsidiary of the state owned assets supervision and Administration Commission of Xinjiang, held 9.96%, the largest shareholder.
By the end of last year, the total assets of Kashi bank were about 14.3 billion yuan, with a capital adequacy ratio of 15.94%, a non-performing loan ratio of 2.29%, and a provision coverage ratio of 234.17%. In 2019, the bank achieved an operating revenue of 500 million yuan, a year-on-year increase of 6.3%, and a net profit attributable to the parent company of 160 million yuan, a year-on-year increase of 96.5%.
In fact, prior to the adjustment of the profit distribution plan, Kashi bank had several records of equity change and executive qualification disqualification.
On May 20, this year, the Kashi Bank Insurance Regulatory Bureau issued a message that Wang Yun, assistant to the president of Kashi bank, and Tian Xiaolong, general manager of compliance risk department, were denied their qualifications on the grounds that they do not meet the qualifications of senior managers of rural small and medium-sized banks. In August last year, due to the violation of relevant regulations by the pledge of new shareholders equity, a change of equity of Kashi bank was also vetoed by the former Kashi banking regulatory bureau. Before that, Dezhan financial investment group transferred 35 million shares from Xinjiang Tongwei investment, becoming the second largest shareholder of the bank. In addition, the annual report of Kashi bank revealed that the shares held by the fourth and fifth largest shareholders of the bank were all frozen by the judiciary, accounting for 7.52% of the total share capital of the bank. The annual report also disclosed that by the end of 2019, the loan concentration of the top ten customers of Kashi bank was 76.23%, which was 5.76% lower than that of the beginning of the year, but still higher than the requirement that the loan concentration of the top ten customers of Kashi bank should be less than or equal to 50%. Source: responsible editor of Securities Times: Yang Bin_ NF4368
In addition, the annual report of Kashi bank revealed that the shares held by the fourth and fifth largest shareholders of the bank were all frozen by the judiciary, accounting for 7.52% of the total share capital of the bank.
The annual report also disclosed that by the end of 2019, the loan concentration of the top ten customers of Kashi bank was 76.23%, which was 5.76% lower than that of the beginning of the year, but still higher than the requirement that the loan concentration of the top ten customers of Kashi bank should be less than or equal to 50%.