In-depth research on "Guangdong Rural Credit Union’s Risky Battle in Restructuring and Transformation"②
At 8:36 pm on December 15, 2020, Huang Zhihao, Secretary of the Party Committee of Guangdong Rural Credit Union and his delegation arrived in Shantou Chenghai District of the city. Subsequently, Li Chuan, chairman of Foshan Rural Commercial Bank, Yang Daiping, chairman of Jiangmen Rural Commercial Bank, and Shi Xuezhou, chairman of Heshan Rural Commercial Bank, also arrived overnight with key employees from each bank. In the next two days, they were divided into five research groups and conducted non-stop research on 15 villages in Chenghai.
"In this survey, in addition to the organizer Guangdong Rural Credit Union, Foshan Rural Commercial Bank, Jiangmen Rural Commercial Bank, and Heshan Rural Commercial Bank are all shareholders and supporting institutions of Chenghai Rural Commercial Bank." They came here to provide suggestions for Chenghai Rural Commercial Bank to serve rural revitalization. "The restructuring has been completed, but assistance is still continuing." Li Chuan, chairman of Foshan Rural Commercial Bank, said.
Targeted assistance is one of the characteristics of Guangdong’s new round of rural cooperative medical reform. Authoritative data shows that in this round of restructuring of rural credit cooperatives, high-quality rural commercial banks have invested a total of nearly 26.74 billion yuan in rural credit cooperatives in the east, west, and north of Guangdong by “injecting capital, injecting intelligence, and injecting systems”, driving other investors to invest. The capital exceeded 18.65 billion yuan. At the same time, it also dispatched 247 management teams and 33 senior executives to the reformed institutions. It not only helped the reformed institutions consolidate capital and resolve financial burdens through funds, but also simultaneously injected management systems, corporate culture, experience and technology .
Reviewing the new round of deepening reform process of rural credit cooperatives, why should we reconstruct the organizational model of Guangdong rural credit cooperatives with the "targeted assistance" model? In targeted assistance, how to build a long-term development mechanism with stable and long-term development based on "injection of capital, intelligence and system", and break the risk "cyclical law" of rural credit cooperatives requiring external assistance every ten years or so. "? The Nanfang Daily research team went deep into more than 20 rural cooperative medical institutions in the province in order to find the answer.
Breaking the problem
Continuing the tradition of “one hero, three gangs”
42 rural credit cooperatives received targeted assistance
“At that time "The funding gap is relatively large," Zhong Guobo, president of Zhanjiang Rural Commercial Bank, recalled that before the "four-in-one" integration of Mazhang, Chikan, Potou and Donghai Lianhe in Zhanjiang City, the four rural cooperative institutions were non-performing. The loan balance remains high, and it is impossible to achieve restructuring and de-insurance with local resources alone.
In this round of restructuring, the large funding gap is the primary problem faced by many rural cooperative medical institutions. Among them, some institutions face core regulatory indicators such as capital adequacy ratio, non-performing loan ratio, and provision coverage ratio that do not meet standards, making risk resolution work more difficult.
In addition, as the reform progresses, a deeper problem has also emerged - some institutions do not have the "soft" conditions for reform. For example, the corporate governance structure is imperfect, and problems such as insider control and external interference are more prominent. Li Yixin, chairman of Nanhai Rural Commercial Bank, also expressed concerns to reporters: "The personnel structure is seriously aging, the thinking is solidified, and the lack of understanding of the new business environment is a problem that needs to be solved during the restructuring."
More than one person The interviewees described the phenomenon of “random lending” to reporters. It is not uncommon for loan terms to be set unreasonably, the proportion of medium- and long-term loans to be too high, loan risk classification results to be inaccurate, the assessed value of collateral to be falsely high, and the implementation of the “three checks” on loans to be ineffective.
To completely reverse the above-mentioned "chaos", restructuring institutions must straighten out historical debts and "offload the burden" while reconstructing the risk control system and "taking a new path." However, “most restructuring institutions do not have the ability to solve these problems by ‘working alone’,” said a person familiar with Guangdong’s rural credit system.
In order to fundamentally solve the problems of historical baggage, institutional structure and internal management, Guangdong has determined a restructuring method that gives full play to the advantages of the "big system" of rural credit - using high-quality rural commercial banks to provide targeted assistance to the restructuring institutions .
"Support not only helps the restructuring institutions, but also helps ourselves." A senior executive of Nanhai Rural Commercial Bank who has worked in the rural credit system for a long time said bluntly that although the Guangdong rural credit system has nearly a hundred independent legal persons , but they "both prosper and suffer"; targeted assistance is not a simple matter of "matching up a good job", but also affects the life and death of the rural credit system.
This is also true. In the history of Guangdong Rural Credit Union, there have been many examples of helping to resolve crises. For example, in 2002, Shunde Rural Credit Cooperative averted danger with the help of the Provincial Credit Union (the predecessor of the Provincial Rural Credit Cooperative) and Dongguan Rural Credit Cooperative.
Today, this idea of ??"one hero, three gangs" has not only continued, but has also been given a deeper connotation.
"Although rural cooperative medical institutions have undergone many rounds of reforms, it is still difficult to break out of the risk 'cyclical law' that requires external assistance every more than ten years." Pei Guang, director of the Guangdong Banking and Insurance Regulatory Bureau, believes , the fundamental reason is that the system and mechanism issues have not been fundamentally resolved.
Therefore, in this round of reform, high-quality rural commercial banks not only strategically invest in the reformed institutions, but also simultaneously inject management systems, corporate culture, experience and technology to help the reformed institutions truly establish and improve modern financial enterprise systems. Data shows that among the 64 rural credit cooperatives in this round of restructuring, a total of 42 rural credit cooperatives have received assistance from high-quality rural commercial banks. The targeted assistance method has greatly promoted the reform process.
Explore
Start from "plus or minus zero" to "establish rules and systems"
Export key talents to supported institutions
How to use the advantages of "small legal person, large system" to provide targeted assistance? Guangdong gave a six-word "answer" - capital injection, intelligence injection, and system injection.
Data show that high-quality rural commercial banks have invested nearly 26.74 billion yuan in total, and have driven other investors to invest more than 18.36 billion yuan, becoming the main force in this round of reform.
High-quality rural commercial banks joined as strategic investors, which gave investors a "reassurance". For example, with the support of Dongguan Rural Commercial Bank’s brand influence and equity mobilization, Zhanjiang Rural Commercial Bank successfully raised more than 100 new investors and raised nearly 750 million yuan in social funds.
“Due to the large amount of shares and high proportion, it directly mobilized the enthusiasm of high-quality investors in Zhanjiang and Dongguan to follow suit.” Zhong Guobo told reporters. Guangzhou Rural Commercial Bank strategically invested in Chaozhou Rural Commercial Bank. By linking the group's resources, it introduced diversified capital and jointly invested nearly 6 billion yuan with concerted parties.
What is even more worth mentioning is that the assistance funds were injected through market-based means, which greatly improved the efficiency of restructuring. In order to save restructuring costs, Shunde Rural Commercial Bank calculated an "economic account" for the restructuring institution and established a financial model to design financial restructuring and capital support plans. "We have saved at least 30% of financial costs through this model." Yao Zhenyong, chairman of Shunde Rural Commercial Bank, told reporters.
"Establishing a new model of cooperation using capital as a link can not only solve the problem of difficulty in introducing investors according to market-oriented principles, but also prevent individual private enterprises and shareholders from improperly interfering in the operation of institutions." Provincial Local Financial Supervision and Management The person in charge of the bureau’s business told reporters.
However, in order to build a long-term development mechanism with stable and long-term development, in addition to "capital injection", "intelligence" and "system injection" are particularly critical.
High-quality rural commercial banks help restructuring institutions rebuild systems such as internal control, business processes, risk management, compliance construction, customer classification, and outlet planning from "plus or minus zero."
"We helped Maoming Rural Commercial Bank develop 433 systems." Qin Weixin, a support cadre of Nanhai Rural Commercial Bank, told reporters that this new system of more than 2 million words covers more than ten business lines. "We also made a three-year overall strategic plan for Maoming Rural Commercial Bank, planning 200 strategic initiatives."
In Chaozhou, Guangzhou Rural Commercial Bank designed and built a " "Three meetings and one layer" is the main body of the corporate governance system that is in line with the modern financial enterprise system to reconstruct its management system and operating mechanism.
"Establishing rules and regulations" has been completed. These high-quality rural commercial banks quickly realized that to achieve a true "change of soup and medicine", "people" are the key; they must rely on the power of "people" Execution ability makes the "gear" of the system run.
Exporting key talents from high-quality rural commercial banks to assisted institutions is another feature of Guangdong’s current round of targeted assistance.
On November 21, 2020, Chenghai Rural Commercial Bank was officially established.
He Kuantao, the key supporter from Foshan Rural Commercial Bank, a targeted assistance organization, also ushered in a new identity-the president of Chenghai Rural Commercial Bank. As a native of Foshan, He Kuantao joined Foshan Rural Commercial Bank right after graduation. Now he has "transplanted" the business philosophy of Foshan Rural Commercial Bank to Chenghai Rural Commercial Bank across 501 kilometers.
In this round of reform, high-quality rural commercial banks sent 247 management teams and 33 senior executives to the reformed institutions, exporting advanced business concepts and management experience. Taking Foshan Rural Commercial Bank as an example, the bank has sent more than 100 assistance teams to Yunfu to carry out special assistance work; Dongguan Rural Commercial Bank has dispatched a 15-person professional management team to Zhanjiang. The business leader of the Provincial Local Financial Supervision and Administration Bureau said that high-quality rural commercial banks not only optimize the total equity and structure of supporting institutions, but also introduce market-oriented concepts and practices.
Pei Guang, director of the Guangdong Banking and Insurance Regulatory Bureau, said that through "capital injection, intelligence injection, and system injection", high-quality rural commercial banks simultaneously inject management systems, corporate culture, experience and technology into supporting institutions, helping the restructuring institutions to truly Establish and improve the modern financial enterprise system.
Turn around
“Good Bank” rating improves financial service capabilities
Seek “win-win” under the “one core, one belt, one region” pattern
With the help of high-quality rural commercial banks, restructuring institutions are gradually transforming.
The most intuitive change is its enhanced ability to resist risks. Taking Zhanjiang Rural Commercial Bank as an example, as of the end of June 2020, the bank's non-performing loan ratio dropped significantly to 1.43, its capital adequacy ratio increased to 24.89, and its provision coverage ratio increased to 319.18.
The significant reduction in the non-performing loan ratio has laid the "foundation" for a substantial improvement in financial service capabilities.
"After the restructuring, our regulatory rating is '2C', which is the label of 'good bank' in the market." According to Wang Yijian, president of Jiangmen Rural Commercial Bank, improving the regulatory rating is crucial. The heads of several institutions told reporters that after restructuring and establishing rural commercial banks, regulatory ratings have been improved, businesses that were previously unable to be carried out have been "unblocked", and product lines have become more complete.
“Now, we can do all the product businesses that meet regulatory ratings.” Zhong Guobo told reporters that after the restructuring, Zhanjiang Rural Commercial Bank’s capital strength has been enhanced, its asset scale and net assets have become larger, and in terms of credit The product amount can better meet the needs of customers.
Statistics also confirm this view - the average annual growth rate of loans to rural cooperative medical institutions in the east, west and north of Guangdong has reached 1.3 times that before the reform.
What is also gratifying is that the reformed rural cooperative medical institutions are focusing on the market positioning of "supporting agriculture and small businesses" and county finance, and are striving to become the "own" bank for local people.
On the seaside of eastern Guangdong, Huilai Rural Commercial Bank is planning to make a big splash in serving the development of local fisheries, planting and breeding industries. "If we can serve fishery companies through the 'Fishing Alliance', such as providing loans to companies that purchase fishing boats, there is still a lot that can be done in business. Through measures such as the construction of 'Credit Villages', more people can obtain loans. Rights."
In Maoming, western Guangdong, Nanhai Rural Commercial Bank helped Huazhou Rural Commercial Bank establish an inclusive finance department, which is responsible for the management of "agriculture, rural areas and farmers" loan business, the development of new "agriculture, rural areas and farmers" and Promotion; Huazhou Rural Commercial Bank also increased the proportion of "supporting agriculture and small businesses" in the performance system from the original 4 to 18.
Data show that the proportion of small and micro enterprise loans of rural cooperative medical institutions in the east, west and north of Guangdong is 32 and 11 percentage points higher than that of the province's banking industry and the province's rural cooperative institutions respectively.
More important is confidence which is more precious than gold. Rural cooperative medical institutions, which few people paid attention to in the past, have now become a "hot potato" in the eyes of investors. "It took a lot of effort to persuade the local government to buy shares in Meizhou Rural Commercial Bank; now more than a year has passed, and the local government has asked to increase its holdings." Yao Zhenyong said. According to industry insiders, this is a "win-win" situation created by Guangdong's rural credit system under the new regional development pattern of "one core, one belt and one district".
Not only that, the risk reduction of local rural cooperative medical institutions has optimized the local financial ecological environment, and more banking institutions dare to "enter" areas that have never been involved. "The improvement of the local credit environment has allowed more Banking institutions are coming to Zhanjiang to open branches," said Cao Xing, member of the Standing Committee of the Zhanjiang Municipal Party Committee and executive deputy mayor.
What is even more worth mentioning is that the "dividends" of targeted assistance do not only favor restructuring institutions. Many high-quality rural commercial banks have realized that assistance will help them expand market breadth and improve customer service depth.
"Customers in Dongguan invest in Zhanjiang, and the two rural commercial banks can link up to better serve customers." A person in charge of Dongguan Rural Commercial Bank said that the "capital" link connects the two places. Customers, markets, and industrial chains are closely linked and have become the starting point for Dongguan Rural Commercial Bank's business expansion.
Front-line research
"We are a credit culture
'Porters'"
When we first arrived in Zhanjiang, Dongguan Rural Commercial Bank Xiang Dongbo, a member of the professional management team dispatched by Zhanjiang Rural Commercial Bank, discovered that there were phenomena such as "indiscriminate lending", unreasonable loan term settings, and an excessive proportion of medium and long-term loans.
The 15-member Dongguan Rural Commercial Bank expatriate team quickly realized that to help Zhanjiang Rural Commercial Bank "change the situation", it was crucial to reshape a stable credit culture. In order to stabilize credit business risks, Xiang Dongbo and his team conduct business training for local employees every two months. He personally also took the lead in working overtime, working 15 hours a day. In order to understand the market, he traveled to 5 counties and 4 districts in Zhanjiang. "I have been to each place at least 20 times."
With the support of Dongguan Rural Commercial Bank, Zhanjiang Rural Commercial Bank has gradually built a comprehensive risk management system, especially paying close attention to credit risk management, strictly controlling pre-loan access, loan review and post-loan Check the gates, reshape the credit culture of the credit team, and stabilize credit business risks. "It can be said that we are the 'porters' of Dongguan Rural Commercial Bank's credit culture."
Data show that after the restructuring, Zhanjiang Rural Commercial Bank's main regulatory indicators have been significantly improved, and its capital strength and risk resistance capabilities have been greatly enhanced. . As of the end of June 2020, the bank's non-performing loan ratio dropped to 1.43, the capital adequacy ratio increased to 24.89, and the provision coverage ratio increased to 319.18.
Reporter’s Notes
Between “breaking” and “establishing”
Reflecting Guangdong’s rules and regulations
The restructuring of rural credit cooperatives is not unique to Guangdong There are many precedents to follow across the country. However, this round of deepening reform of Guangdong Rural Credit Union involves a large amount of funds, a large number of institutions, and complex underlying problems, which determines that the reconstruction of the organizational model cannot completely "copy" the experience of other provinces, and must find a new path of adapting measures to local conditions and implementing classified policies. .
First of all, we should not engage in “one size fits all” and maintain the status of county legal persons as much as possible when conditions permit. There are 46 rural cooperative medical institutions in the province that have adopted the single-family restructuring model.
Secondly, for single rural cooperative medical institutions with high restructuring costs and difficulty in attracting investors, Guangdong adopted the model of merging and establishing rural commercial banks, which significantly reduced the cost of reform and enhanced the ability of rural cooperative medical institutions to resist risks and survive and develop. ability.
Thirdly, it is to establish cross-regional capital relationships. As strategic investors, high-quality rural commercial banks in the province will "inject capital, intelligence, and system" to the assisted rural cooperative institutions to varying degrees, becoming the assisted rural cooperative institutions. The "accelerator" for the development of rural cooperative medical institutions.
It can be said that Guangdong has found its own rhythm and rules between the "destruction" and "establishment" of rural cooperative medical institutions. However, reform is still in progress. How to use the advantages of the new organizational model to consolidate the hard-won reform results is an issue that Guangdong Rural Credit Union people must think about in the future.
Research team: Chen Ying, Li Hualian, Tang Liuwen, Tang Zizhan, Wang Biao