China Business Network (CBN) recently reported that, according to statistics from the Enterprise Early Warning Database, nearly 200 small and medium-sized banks have been deregistered since the beginning of 2024, mainly rural financial institutions. This includes direct deregistration, approved mergers, approved dissolutions. The number far exceeds the previous three years (2021 to 2023) combined.
According to CBN, Chinese government promotes the merger and reorganization of high-risk small and medium-sized financial institutions as an important means to lower financial risks. According to the “Financial Stability Report (2024)” recently released by the Chinese central bank, at the end of 2023, the central bank conducted financial ratings on 3,936 banking institutions. Judging from the rating results, there were 357 “red zone” banks, among which, rural cooperative institutions, as well as village and town banks accounted for a higher proportion.
Financial experts expressed beliefs that, in the future, regional small and medium-sized banks will enter a “era of subsistence”, and that the number of high-risk banks is expected to further decline due to the ongoing wave of mergers.
Source: CBN, December 30, 2024
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