Behind the change of chairman of Jiaxing Bank： the growth rate of net profit for three consecutive years was negative, and internal control loopholes were frequently exposed.
Source: Finance from the media
Original title: Behind the change of the chairman of this billion-dollar bank: the growth rate of net profit for three consecutive years is negative, and internal control loopholes are frequently exposed.
Source: President’s Summary
"Behind the important personnel changes in Jiaxing Bank, the bank’s performance in the past three years has been relatively weak."
Jiaxing Bank recently issued "Notes on the Change of Chairman", which shows that according to the resolution of the 41st meeting of the fifth board of directors of Jiaxing Bank, Lin Bin, the president of Jiaxing Bank, was elected as the chairman, and was approved by Zhejiang Supervision Bureau in China Banking and Insurance Regulatory Commission, China.
It is worth noting that Lin Bin became the president of the bank in August 2019, and the last president of the bank, Tao Lan, was dismissed after only three years as president. With the promotion of Lin Bin to the position of chairman, it means that the post of president of Jiaxing Bank will be vacant.
According to the annual reports of Jiaxing Bank over the years, the performance of the bank has been relatively weak in the past three years, and the growth rate of net profit has turned from positive to negative in 2018, plummeting by 65.06 percentage points to -4.92%. The growth rates of net profit in 2019 and 2020 are 5.64% and -4.30% respectively. At the same time, the bank’s risk control loopholes have been frequently exposed in recent years. From June 2014 to March 2021, China Judgment Document Network disclosed six cases about the bank being defrauded of loans, which showed that the bank was defrauded of loans six times in less than three years from April 2012 to December 2014, involving an amount of 84.2 million yuan; On June 15th, 2021, the bank was fined 850,000 yuan by China Banking and Insurance Regulatory Commission Jiaxing Supervision Branch for three illegal facts, such as the related party transactions were not approved as required, the types and weights of performance evaluation indicators did not meet the regulatory requirements, and the information disclosure of the annual report was incomplete.
Is Jiaxing Bank’s coaching change related to its weak performance in recent years? How does it view the frequent exposure of its internal control loopholes? The reporter provided an email to the relevant person in charge of the bank to send an interview letter, and did not get any reply before the press release.
Behind the personnel change:
Weak performance in the past three years
According to the annual reports of Jiaxing Bank, the new chairman of Jiaxing Bank was promoted from President Lin Bin, and the previous chairman Xia Linsheng has been the chairman of Jiaxing Bank for nearly six years since October 2015. Lin Bin became the president of the bank in August 2019, and the last president of the bank, Tao Lan, was dismissed after only three years as president.
As a matter of fact, Lin Bin’s promotion to the position of chairman of Jiaxing Bank has long been a harbinger. On March 15th this year, WeChat official account, the organization department of Jiaxing Municipal Committee of the Communist Party of China, issued the Public Notice of Jiaxing City on the Proposed Promotion and Appointment of Leading Cadres, Institutions and Enterprise Leaders. Lin Bin, then deputy secretary of the Party Committee and president of Jiaxing Bank, was to be appointed as "Party Secretary and Chairman of Municipal Financial Enterprises". According to the resume disclosed in the circular, Lin Bin was born in Qingtian, Zhejiang Province in January 1973. He joined the Communist Party of China (CPC) in May 1991 and joined the work in August 1991. He holds a university degree and holds a master’s degree in public administration.
With the promotion of Lin Bin to the position of chairman, it means that the post of president of Jiaxing Bank will be vacant. As of press time, Jiaxing Bank has not released any personnel information about the new president of the bank.
It is worth noting that behind the important personnel changes of Jiaxing Bank, the performance of the bank has been weak in the past three years, and the growth rate of net profit has turned from positive to negative in 2018, and the growth rate of net profit has been positive and negative in the next two years. The data shows that in 2017, 2018, 2019 and 2020, the bank’s net profit was 671 million yuan, 638 million yuan, 674 million yuan and 645 million yuan, respectively, with growth rates of 60.14%, -4.92%, 5.64% and -4.30%.
As far as the performance in 2020 is concerned, by the end of 2020, the total assets of Jiaxing Bank exceeded 100 billion yuan, reaching 104.673 billion yuan, a year-on-year increase of 27.13%; Total liabilities were 89.841 billion yuan, up 28.44% year-on-year. In the case of double-digit growth in total assets and total liabilities, the bank’s net profit decreased by 4.30% to 645 million yuan in 2020, while its operating income increased by 7.59% to 255 million yuan year-on-year.
In addition, by the end of 2020, the core Tier 1 capital adequacy ratio of Jiaxing Bank dropped significantly by 1.56 percentage points to 8.57% year-on-year, which was the lowest level of the bank in the past six years, and was significantly lower than the national average of 10.72% in the same period.
Internal control loopholes are frequently exposed.
In addition to the unsatisfactory performance in the past three years, the reporter noted that the risk control loopholes of Jiaxing Bank have been frequently exposed in recent years.
From June 2014 to March 2021, China Judgment Document Network disclosed six cases about the bank being defrauded of loans, which showed that the bank was defrauded of loans six times in less than three years from April 2012 to December 2014, involving an amount of 84.2 million yuan. At the same time, according to the disclosure of China Banking and Insurance Regulatory Commission official website, on June 15th, 2021, Jiaxing Bank was fined 850,000 yuan by China Banking and Insurance Regulatory Commission Jiaxing Supervision Branch for three illegal facts, such as the related party transactions were not approved as required, the types and weights of performance evaluation indicators did not meet the regulatory requirements, and the annual report information disclosure was incomplete.
From April 2012 to June 2014, in order to obtain a bank loan for the company’s operation, the defendant Zhu Lighting colluded with the defendants Cao Min and Zuo Xiaohong in advance, using the loan as a bait, instigated and organized Zheng and others, the market operator of Kaisheng Small Commodity Company, to provide the application materials needed for the loan, and then defrauded Jiaxing High-tech Sub-branch of personal business guarantee loans by forging purchase contracts or IOUs and providing false bank running bills.
In mid-August, 2012, the defendant, Yang Yanfei, forged a supply contract on the grounds that Jiashan Tianwei Energy Technology Co., Ltd., which he operated, needed capital turnover in order to defraud the bank loan and conceal the real situation that it was in trouble, and asked Jiashan Dongfang Industrial Co., Ltd., which was operated by Jin Mouyi, and Jiashan Tianjiao Decoration Materials Co., Ltd., which was operated by Li, to provide guarantees for it, so as to apply for a loan of 3 million yuan from Jiashan Sub-branch of Jiaxing Bank Co., Ltd. On September 7, 2012, the defendant Yang Yanfei signed a contract with Jiashan Branch of Jiaxing Bank for a loan of 3 million yuan in the name of Jiashan Tianwei Energy Technology Co., Ltd. On the same day, Jiashan Sub-branch of Jiaxing Bank transferred the loan of 3 million yuan to the designated account of Jiashan Feidi Metal Products Co., Ltd., and the defendant Yang Yanfei immediately transferred 3 million yuan to his private account, most of which was used to repay the debts owed to people close to him, and left his family with 200,000 yuan and fled the same day with the balance.
On May 8, 2013, the defendants Zhang Xiaohui and Xu Furong applied for a loan of RMB 3 million from Huzhou Zhili Small and Micro Enterprise Franchise Branch of Jiaxing Bank by providing false purchase and sale contracts and financial statements in the name of the defendant Xu Furong purchasing raw materials from Huzhou Zhili Xinzhongcheng Zipper Factory.
On August 6, 2013, the defendant Chen Xiaoliang defrauded Jiaxing Bank Huzhou Zhili Small and Micro Enterprise Franchise Branch for a loan of RMB 2.1 million by providing false purchase and sales contracts on the grounds of purchasing goods.
On April 24, 2014, the defendant, Yao Yaofeng, forged the purchase and sale contract between Zhejiang Jiefeng Logistics Co., Ltd. and Changxing Hongqiao Xinjie Auto Parts Business Department and fabricated the company’s financial statements. Zhejiang Changxing Municipal Engineering Co., Ltd. provided the guarantee and defrauded Jiaxing Bank Changxing Sub-branch of a loan of 3 million yuan.
In December 2014, defendants Cao Liqi and Wang Wei borrowed RMB 3 million from Huzhou Zhili Small and Micro Enterprise Franchise Branch of Jiaxing Bank in the name of defendant Wang Wei on the grounds that a company in China needed to buy raw materials. The loan period was until July 2015.
According to public information, Jiaxing Bank was established on December 22, 1997, formerly known as Jiaxing City Cooperative Bank. It is the first local joint-stock commercial bank with legal person qualification initiated by Jiaxing Municipal Government based on the original three urban credit cooperatives and six rural credit cooperatives in Jiaxing City. It was renamed Jiaxing Commercial Bank in June 1998 and Jiaxing Bank in December 2009. At present, Jiaxing Bank has a registered capital of 1.421 billion yuan and 78 branches (including Huzhou Branch, Shaoxing Branch, Jinhua Branch and Wenzhou Branch in Zhejiang Province), with more than 1,700 employees.
Author: Yanshan Zeng Qiang
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