Small and medium-sized banks have reformed insurance, and the CBRC has said so

Wen | Su Xianggao Yang Jie

On May 20, the CBRC held a communication meeting, and the head of the relevant department of the CBRC said that the CBRC continued to strengthen and improve corporate governance supervision, promote financial institutions, including small and medium-sized banks, to deepen corporate governance reform, and take this as an important means to prevent and resolve risks and achieve high-quality development.

The head of the relevant department of the CBRC said that, in the next step, the focus of the supervision of urban commercial banks' reform of insurance includes adhering to the leadership of the Party in financial work, improving corporate governance, forming a joint force between the regulatory authorities and local territories, and promoting strong supervision and supervision in an integrated way. The key points of supervision of small and medium-sized rural banks include four aspects: adhere to the bottom line thinking, focus on risk prevention and resolution; Insist on reform thinking and promote deepening reform; Adhere to the principle of "small and scattered", and improve the ability of financial services; Adhere to the situation of strict supervision and improve the efficiency of supervision.

Remarkable achievements have been made in reforming chemical insurance

Urban commercial banks and rural small and medium-sized banks are the main components of small and medium-sized banks.

According to the head of the relevant department of the CBRC, as of the end of the first quarter, there were 128 legal person institutions of urban commercial banks nationwide, with a total assets of 46.7 trillion yuan, accounting for 15.5% of China's commercial banks and 13% of banking financial institutions.

The head of the relevant department of the CBRC said that since the 2017 National Financial Work Conference, the regulatory authorities have continued to urge and guide urban commercial banks to adhere to their positioning, return to their roots, focus on their main business, and continue to rectify financial chaos, achieving remarkable results.

The data shows that from 2017 to 2021, the average annual growth rate of urban commercial banks' assets was 9.8%, 13.3 percentage points lower than the average annual growth rate (23.1%) from 2011 to 2016, basically returning to the average level of commercial banks. In terms of asset structure, the proportion of urban commercial bank loans in total assets rose to 51.3% from 36% at the end of 2016, the proportion of investment assets fell from 40.6% to 35.2%, and the proportion of interbank assets fell from 11.8% to 5.9%. In terms of rectification of financial chaos, 2842 urban commercial banks have been punished since 2017, with a total of 1.2 billion yuan confiscated.

In terms of the development of rural small and medium-sized banks, the head of the relevant department of the CBRC said that the overall development of rural small and medium-sized banks was stable, the overall risk was controllable, and strongly supported the development of the real economy.

Data shows that by the end of 2021, there are 3902 rural small and medium-sized banks in China, including 2199 rural credit cooperatives (including rural commercial banks and rural cooperative banks). Assets and liabilities grew steadily. By the end of 2021, assets and liabilities were respectively 45.7 trillion yuan and 42.2 trillion yuan, accounting for 14.1% of the banking industry, up 0.7 percentage points from the end of 2017. All regulatory indicators are generally good, with a capital adequacy ratio of 12.4%, a non-performing loan ratio of 4%, and a provision coverage rate of 122.9%.

In addition, in terms of risk disposal, since 2018, the CBRC has disposed 627 high-risk rural small and medium-sized banks, and disposed 2.6 trillion yuan of non-performing loans, more than the total amount of the previous decade. In addition, the development of small and medium-sized rural banks also shows the characteristics of further consolidation of main responsibilities, continuous increase of small loans to support agriculture, initial containment of shareholder equity chaos, and breakthrough of system and mechanism reform.

Small and medium-sized banks still have some "structural" problems

While achieving remarkable results, the head of the relevant department of the CBRC also pointed out that at present, urban commercial banks and rural small and medium-sized banks also have "structural" problems, such as large historical accumulation of risks in some regions.

As for urban commercial banks, the head of relevant departments of the CBRC said that due to cyclical, institutional, structural and behavioral factors, there are also some structural problems in the field of urban commercial banks. The problems accumulated by individual institutions over the years are serious, and there are certain risks and hidden dangers.

Based on the potential risks in the development of urban commercial banks, the regulatory authorities, together with the local party committee and government, have focused on a series of risk prevention and control. First, improve the disposal policy; The second is to promote the reform of insurance, including increasing non-performing disposal, promoting reform and restructuring, promoting the introduction of war investment, implementing precision bomb dismantlement and other measures; The third is to seek to address both the symptoms and root causes. Measures include strengthening the organic integration of Party leadership and corporate governance, strengthening corporate governance supervision, and introducing management talents.

As for small and medium-sized rural banks, the head of relevant departments of the CBRC said that the risks of small and medium-sized rural banks were generally controllable and convergent. However, from the perspective of stock, the risk volume accumulated historically in some regions is large, and it is necessary to continue to increase the disposal efforts; In terms of increment, the risks brought by epidemic impact, economic transformation and industry reform will gradually emerge.

"The sustainable development of small and medium-sized rural banks faces challenges, which are mainly reflected in five aspects: the path of the party's leadership into corporate governance needs to be improved; there are defects in shareholder equity management and corporate governance; there are insufficient resources for risk disposal in some regions; the legal system for risk prevention and control is not sound; and the competition in the county financial market is fierce." The head of the relevant department of the CIRC said.

The next step is to adhere to the strict supervision situation and improve the supervision efficiency

After analyzing the above problems, the CBRC also issued a "prescription". It is reported that since this year, the CBRC has mainly carried out four aspects of work: continue to implement the three-year action plan for improving corporate governance; Arrange rectification of key corporate governance issues; Carry out special rectification of equity and related party transactions; Improve daily risk monitoring and early warning.

With regard to the future supervision focus of urban commercial banks, the head of relevant departments of the CBRC said that the next step is to take improving corporate governance as the top priority of urban commercial banks' reform and insurance, strengthen shareholder equity supervision, promote the formation of effective self-discipline, and achieve high-quality development; The financial supervision department will work with the local party committee and government to jointly prevent and resolve regional financial risks; The regulatory department will adhere to the "supervision" orientation, strengthen the linkage and coordination with the discipline inspection and supervision department, and promote financial anti-corruption and financial risk disposal in an integrated way.

For small and medium-sized rural banks, the CBRC will continue to follow the basic principles of stabilizing the overall situation, overall planning and coordination, implementing classified policies, and accurately dismantling bombs, deepen the reform of small and medium-sized rural banks into insurance, and continue to enhance the ability to serve the real economy.

On the one hand, we will not relax in risk prevention and resolution. Widen the source of risk disposal funds, reasonably use deposit insurance funds, financial stability guarantee funds, etc., and handle key high-risk institutions in a "one bank, one policy" way to ensure that risks do not spill over. On the other hand, we will unswervingly advance the deepening of reform. We will encourage quality banks, insurance companies and other qualified institutions to participate in the merger and reorganization of small and medium-sized rural banks, work with relevant departments to implement support policies to encourage the merger and reorganization of small and medium-sized rural banks, and promote the merger and reorganization of small and medium-sized rural banks and regional integration in accordance with the principle of marketization and legalization.

In terms of improving financial service capacity, we should further optimize the positioning and supervision of supporting agriculture and small businesses, and urge small and medium-sized rural banks to adhere to their main responsibilities. Adhere to the principle that credit funds are sourced locally, used locally, and distributed in small amounts. It is not allowed to absorb large deposits from other places, issue loans from other places, strictly control large amount credit, and sink the service focus on the local market.

In addition, we should adhere to the strict supervision situation and improve the supervision efficiency. Adhere to the orientation of "supervision as supervision", continue to strengthen the construction of supervision style, strengthen the responsibility of supervision, and vigorously carry forward the supervision spirit of being conscientious, daring to supervise, proficient in supervision, and strict accountability.

The head of the relevant department of the CBRC said that in the next step, the CBRC will continue to make efforts to solidly promote the effectiveness of various work, constantly improve the quality and efficiency of corporate governance of bancassurance institutions, and provide effective support for the reform of small and medium-sized banking institutions to turn insurance into high-quality development.

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