Jiangsu Zijin Rural Commercial Bank Co Ltd

The Jiangsu Securities Regulatory Bureau has issued a warning letter to Jiangsu Zijin Rural Commercial Bank as an administrative regulatory measure, citing multiple violations in its fund sales business. According to the decision, some personnel responsible for compliance risk reviews of cooperative institutions and product access for fund distribution had not obtained fund practitioner qualifications. The committee responsible for approving cooperative institutions and product access for fund distribution did not consistently include compliance personnel and product researchers among its members. When providing services for some investors purchasing funds, the bank failed to obtain information on investors' occupations, income sources, assets, debts, and other details as required. It also failed to submit filing materials for the appointment of the head of the fund sales business department and the departure audit report of the former head as stipulated. These actions violated multiple regulations, including the Measures for the Suitability Management of Securities and Futures Investors. Jiangsu Zijin Rural Commercial Bank was established in March 2011 with a registered capital of 3.661 billion yuan. It listed on the A-share main board on January 3, 2019, becoming the first A-share listed rural commercial bank from a provincial capital in China.

Several banks recently announced caps on the overall financing costs of personal loans. State-owned large banks, joint-stock banks, city commercial banks, and rural commercial banks show an overall stepwise increase but with internal divergence. Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank all have an annualized rate cap of 6% for personal consumer loans and business loans, while Postal Savings Bank of China and Bank of Communications set the cap at 12%. Among joint-stock banks, China Merchants Bank, China CITIC Bank, and several others cap their self-operated consumer loans at 12%, Ping An Bank reaches 18.5%, and China Bohai Bank and Evergrowing Bank go up to 24%. For business loans, China Everbright Bank caps at 8%, Huaxia Bank at 10%, Ping An Bank at 20%, and China Bohai Bank at four times the loan prime rate. Among city commercial banks, Qilu Bank, Bank of Jilin, and Qishang Bank set the overall financing cost cap at 18%, while Bank of Chengdu caps self-operated consumer loans and business loans at just 7%. Rural commercial banks show clear divergence: Chongqing Rural Commercial Bank, Shunde Rural Commercial Bank, and Guangzhou Rural Commercial Bank cap consumer loans at 12%, Xiamen Rural Commercial Bank and Zijin Bank go as high as 24%, and Chongqing Rural Commercial Bank also sets a 10% cap for loans to farmers. The cap for cooperative internet loans is generally 24%. These caps take effect from August 1, 2026, and all represent the rate ceiling under normal repayment conditions. Su Xiaorui, senior researcher at Suxi Zhiyan, said that the rate caps correspond to different bank customer segments, and transparent disclosure with tiered stratification is an important sign of a maturing credit market.

The Zijin Convertible Bond issued by Zijin Bank will expire on July 22. As of July 15, the unconverted ratio reached as high as 99.99%. The bond was issued in 2020 with a scale of 4.5 billion yuan, and Zijin Bank will most likely face a rigid redemption at maturity. The Qingnong Convertible Bond from Qingdao Rural Commercial Bank will also expire on August 25. Currently, the six outstanding bank convertible bonds in the market are showing divergent performance. For the Shangyin Convertible Bond and Changyin Convertible Bond, the underlying stock prices are already above the conversion prices, with low conversion premiums, indicating strong conversion momentum. For the Chongyin Convertible Bond, the underlying stock price is slightly above the conversion price, but the conversion premium is 12.30%, limiting the momentum for large-scale conversion. For the Xingye Convertible Bond, Zijin Convertible Bond, and Qingnong Convertible Bond, the underlying stock prices are all below the conversion prices, suggesting weak conversion willingness. Dong Ximiao, chief researcher at Zhaolian, stated that a low conversion rate indicates the convertible bonds have a limited role in supplementing core tier-one capital. Banks could consider revising conversion prices and broadening capital replenishment channels.