According to the IPO prospectus updated on July 8, Shanghai Rural Commercial Bank plans to issue no less than 964 million shares and no more than 2893 million shares. After deducting the issuance expenses, all the funds raised by the issuance will be used to supplement the banks core tier one capital and improve the capital adequacy level.
According to the official website of Shanghai Agricultural commercial bank, the bank was established in August 2005. It is a corporate bank controlled by state-owned assets and headquartered in Shanghai. It is the first provincial joint-stock commercial bank established on the basis of rural credit cooperatives in China. At present, it has a registered capital of 8.68 billion yuan, more than 360 business outlets and more than 7000 employees.
According to this years second quarter report, by the end of June 2020, the banks total assets reached 956.453 billion yuan. This scale ranks the third among the agricultural commercial banks, second only to Chongqing Agricultural commercial bank and Beijing Agricultural commercial bank, which have more than one trillion assets.
From the perspective of capital adequacy ratio, the banks capital adequacy ratio at the end of the first half of the year was 14.52%, and the core tier one capital adequacy ratio and tier one capital adequacy ratio were both 11.70%, both in the forefront of the industry in the same period. However, it should be noted that, according to the prospectus, the capital adequacy index of the bank has a continuous downward trend since 2018. If the IPO is successful, it will undoubtedly effectively curb this momentum.
In addition, in the first half of this year, the bank achieved revenue of 10.446 billion yuan, a year-on-year increase of 3.12%; net profit of 4.179 billion yuan, a year-on-year decrease of 2.27%.
It is worth noting that in recent years, the bank has made every effort to promote the secondary transformation and development of retail business, and the business structure has been optimized, among which the personal consumption loan has developed rapidly. Data show that by the end of 2019, the banks balance of personal consumption loans reached 16.859 billion yuan, a sharp increase of 321.69% over the previous year.
On the way of listing of Shanghai Agricultural commercial bank, the ownership structure is undoubtedly the biggest obstacle.
According to the relevant requirements of the measures for the implementation of administrative licensing matters of rural small and medium-sized banks of the China Banking and Insurance Regulatory Commission, the total investment and shareholding proportion of a single domestic non-financial institution / non bank financial institution and its related parties shall not exceed 10% of the total equity of rural commercial banks.
According to the prospectus, as of the end of 2019, Shanghai State-owned Assets Management Co., Ltd., COSCO Shipping Group and Baoshan Iron and Steel Co., Ltd. were the largest shareholders of Shanghai Agricultural commercial bank, holding 9.22% shares. Among them, Shanghai state owned Assets Management Co., Ltd. and its related parties, persons acting in concert, Shanghai International Group and Shanghai International Group Asset Management Co., Ltd. hold 18.46% of the shares of the bank. Obviously, this does not meet regulatory requirements.
As early as June 2019, when Shanghai Banking and Insurance Regulatory Bureau approved the IPO of Shanghai Agricultural commercial bank, it clearly required the bank to complete the rectification of equity issues before the formal A-share listing.
One year later, the equity of Shanghai Rural Commercial Bank has changed greatly. On July 6, 2020, Shanghai Banking and Insurance Regulatory Bureau approved Shanghai Jiushi (Group) Co., Ltd. to transfer 413 million shares of Shanghai Agricultural Commercial Bank held by Shanghai International Group and 320 million shares of Shanghai Agricultural Commercial Bank held by Shanghai International Group Asset Management.
After the equity change, Jiushi group held 734 million shares of Shanghai Agricultural and commercial bank, holding 8.45% of the shares. This means that the proportion of shares held by Shanghai state owned Assets Management Co., Ltd. and its related parties and persons acting in concert has dropped to 10.01%.
The 11th listed agricultural commercial bank?
Before that, 10 agricultural commercial banks in China, including Chongqing Agricultural commercial bank, Guangzhou agricultural commercial bank, Qingdao Agricultural commercial bank, Zijin agricultural commercial bank, Changshu Agricultural commercial bank, Jiutai agricultural commercial bank, Wuxi agricultural commercial bank, Suzhou Agricultural commercial bank, Jiangyin agricultural commercial bank and Zhangjiagang agricultural commercial bank have successfully landed in the capital market. Among them, Chongqing Agricultural commercial bank realized a + H share listing, Jiutai agricultural commercial bank and Guangzhou agricultural commercial bank listed H shares, and the rest were A-share listed banks.
If Shanghai Agricultural commercial bank passes the meeting smoothly, it will become the ninth A-share listed agricultural commercial bank, or is expected to become the 11th agricultural commercial bank landing in the capital market in China.
Prior to this, Dongguan agricultural commercial bank has formally submitted an application for listing to the Hong Kong Stock Exchange in June, but has not disclosed the progress of the first step.