What’s new: A financial holding company backed by the Nanchang city government has bought a controlling stake in Jiangxi Yumin Bank Co. Ltd., marking the first time a state-owned company has taken control of one of China’s private lenders.
The National Financial Regulatory Administration has approved Nanchang Financial Holding Co. Ltd.’s acquisition of a 30% stake in the Jiangxi lender from its controlling shareholder, Zhengbang Group Co. Ltd., according to the regulator’s website.
The transaction of 600 million shares will make the Nanchang state enterprise the controlling shareholder of Jiangxi Yumin Bank, replacing Zhengbang.
Background: Opened in 2019 with backing from Zhengbang and eight other private investors, Jiangxi Yumin Bank is the 18th of China’s 19 privately-owned commercial banks to begin operations.
Zhengbang, one of China’s leading hog farmers and pork producers, has been mired in debt since 2020 due to aggressive business expansion and the subsequent decline in pork prices — a risk that all pork producers face when navigating what is known as the “hog cycle.”
In 2023, Zhengbang’s Shenzhen-listed unit Jiangxi Zhengbang Technology Co. Ltd. entered bankruptcy restructuring after it reported insolvency in 2022.
Jiangxi Yumin Bank has also been struggling with declining business. The lender reported 242 million yuan ($34 million) net loss in the first three quarters 2023 on top of 254 million yuan revenue. By the end of September 2023, the bank had 17.1 billion yuan in total assets with liability of 15.5 billion yuan.
Contact reporter Han Wei (weihan@caixin.com)
