Recently, the website of the China Banking and Insurance Regulatory Commission announced that the Shanxi Regulatory Bureau has approved Wang Qi's qualification as the Deputy President of Jinshang Bank. Jinshang Bank (02558.HK), as an institution listed on the Hong Kong Stock Exchange, is relatively low-key in the public eye; however, the appointment of Wang Qi as the new Deputy President and the issues surrounding the senior management team of Jinshang Bank have many stories, including the downfall of two Chairmen.
Approval content from the China Banking and Insurance Regulatory Commission
Source of the chart: China Banking and Insurance Regulatory Commission website
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Public information shows that Jinshang Bank originated from the establishment of Shanxi Taiyuan City Commercial Bank Co., Ltd. in October 1998; after several years of development, it was officially renamed Jinshang Bank Co., Ltd. at the end of December 2008 with the approval of the China Securities Regulatory Commission; and it was listed on the Hong Kong Stock Exchange on July 18, 2019; as of the end of the first quarter of 2024, Jinshang Bank's total assets were 356.43 billion yuan, with operating income of 1.302 billion yuan for the quarter and a net profit attributable to shareholders of 530 million yuan.
However, since its IPO in July 2019, the bank's stock price has been on a downward trend after touching 3.95 yuan per share on the opening day, reaching around 1.50 yuan per share by the end of the year. Since then, for a full five years, the stock price has remained stagnant around this price, with trading volume also lackluster, making it one of many &#34;penny stocks&#34; in the Hong Kong stock market.
Behind this seemingly stable appearance of Jinshang Bank, there are actually many issues worth investigating.
Using the controversial name &#34;Jinshang&#34;
The Chinese pay attention to &#34;justified reasons&#34; for names, as a name can be both a reason for doing things and a &#34;signboard&#34;; at the same time, business people often like to use a good &#34;name&#34; to seek good luck and attract attention. The name Jinshang Bank comes from &#34;Jinshang&#34;. Currently in China, there are also banks like Zhejiang Commercial Bank, Huizhou Commercial Bank, among others, with Zhejiang Commercial Bank being the most successful and one of the twelve national joint-stock commercial banks in China.
Looking closely, in ancient Chinese history, there were ten major business groups, namely Huizhou merchants (Anhui), Jiangyou merchants (Jiangxi), Guangdong merchants (Guangdong), Shandong merchants, Jiangsu merchants, Ningbo merchants (Zhejiang), Fujian merchants, Longyou merchants (Zhejiang), Qin merchants (Shaanxi), and Jin merchants (Shanxi), among which Huizhou, Guangdong, and Jin merchants were the most famous, known as the &#34;Three Major Business Groups&#34;.
However, historically, Jin merchants have been controversial and shadowed due to their unsavory rise to wealth and actions during national crises; in the modern era, from Jia Yueting who said &#34;I will return to China next week&#34;, to the Puthen Hospital incident, the collective rights protection triggered by the runaway radish, Li Yanhong, and the recent return to Henan for investment by Terry Gou who threatened to &#34;give food to the mainland&#34;, objectively speaking, using the name &#34;Jinshang&#34; may not necessarily have the positive impact that names like Zhejiang merchants and Huizhou merchants have
And these are not just &#34;superstitions&#34;. In fact, there have been relevant statistics abroad showing that outstanding companies or products in the capital market often have a name that is catchy or carries a profound meaning. For example, Quantum Fund, which implies Soros's investment philosophy and thoughts; and the Vanguard series index funds recommended by Buffett, named after the ship that the Puritans crossed the ocean with, not only symbolizes the pioneering spirit of the Puritans, but also gains wide recognition in Anglo-Saxon countries like the United States.
Development lag, utilitarian flaws in business structure
Behind a name is actually a reflection of spirit, thinking, concepts, and cognition. A good name often signifies relatively outstanding connotations while resonating with people. From this perspective, naming controversial names based on subjective preferences or local sentiments may not be the best choice. In fact, in a horizontal comparison, JINSHANG BANK's development is indeed relatively lagging. Taking a total of 10 listed city commercial banks outside the developed southeastern coastal areas as a reference.
Using the operating income of each bank in 2016 as the base &#34;1&#34;; by 2023, JINSHANG BANK has only increased from &#34;1&#34; to &#34;1.27&#34;, not only lagging behind faster-growing peers such as Chengdu Bank, Changsha Bank, and Qilu Bank, but even falling behind Lanzhou Bank, which has inferior resource endowment and regional economy (&#34;1.32&#34;); among the randomly selected 10 banks, JINSHANG BANK is in an embarrassing position, ranking last in both growth rate and absolute numbers.
In absolute terms, in 2016, JINSHANG BANK's operating income was 3.868 billion yuan, although at the bottom, it was only 650 million yuan behind Xi'an Bank's 4.518 billion yuan; by 2023, JINSHANG BANK's operating income was 4.915 billion yuan, widening the gap to 2.29 billion yuan.
Operating income growth overview of 10 city commercial banks outside the developed southeastern coastal areas from 2016 to 2023
Source: iFind
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While experiencing weak growth, JINSHANG BANK's asset quality and business structure also show significant flaws. By the end of 2023, the non-performing loan ratio was 1.78%, which, when compared with A-share listed banks, is at a very high level, second only to Zhengzhou Bank's 1.87% and Qingnong Commercial Bank's 1.81%; at the same time, the attention loan ratio is 3.70%, indicating a high level as well.
Overview of non-performing loan ratios of A-share listed banks by the end of 2023
Unit: billion yuan; Source: iFind
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Not only is the asset quality worrying, but upon closer examination of the detailed data, the utilitarian mindset in its operational approach and the rudimentary level of risk control are glaringly evident
At the end of 2023, Jinshang Bank had a total of 2.603 billion yuan in non-performing corporate loans, with the real estate industry alone accounting for 0.894 billion yuan, a high proportion of 34.34%. The construction industry, which is closely related to real estate, had 0.28 billion yuan, accounting for 10.76%; together, they accounted for 45.10%. Meanwhile, in the bank's personal loans, the balance of mortgage loans reached as high as 22.984 billion yuan, accounting for 72.23%. Throughout Shanxi Province, even the provincial capital Taiyuan is not strongly felt among the second-tier cities, let alone other third, fourth, and fifth-tier small cities. If the industry continues to decline, the potential risks of personal loans cannot be ignored.
In other words, Jinshang Bank not only has the lowest growth in operating income, but even this &#34;achievement&#34; has a high degree of &#34;water content,&#34; relying heavily on intensive investments in the real estate industry. In principle, banks should operate prudently and avoid high industry or single customer concentration, a &#34;utilitarian&#34; operating model that is rare in the industry.
Furthermore, even with high industry concentration, there is room for maneuver as long as risk control is in place. However, Jinshang Bank's risk control &#34;report card&#34; shows a non-performing loan ratio of 10.56% in the real estate industry for corporate loans, which is significantly inferior compared to peers.
Overview of Jinshang Bank's asset quality by industry category at the end of 2023
Unit: billion yuan, %; Basic data source: iFind
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New Deputy General Manager Lacks Banking Experience
No pain, no gain. The operation of Jinshang Bank is truly lamentable. In the land of Shanxi, historically, there have been many loyal and righteous individuals, whether it's Jie Zitui cutting his flesh to feed Lord Chong'er, or the characters like Cheng Ying and Gongsun Chou in the story of the Zhao Orphan, or the valiant Guan Yu in the Romance of the Three Kingdoms, all deeply imprinted in the history and culture of the Chinese nation. The mention of history is not without reason.
In recent years, perhaps due to the immense temptation of rapid &#34;wealth&#34; in this land where coal can be found three feet underground, and the lack of &#34;rules of the game&#34; based on certain social consensus to restrain it, the economic development in Shanxi is far behind Inner Mongolia, which also has abundant coal resources. Issues such as resource entanglement, interest transmission, wealth disparity are frequently reported, showing clear signs of the &#34;Dutch disease.&#34; In the first half of 2024, the total GDP of Inner Mongolia was 1.163 trillion yuan, with a year-on-year growth rate of 6.2%, while Shanxi's total GDP was 1.118685 trillion yuan, with a year-on-year growth rate of only 1.9%. With such abundant resource endowments, Shanxi, holding onto its &#34;treasure trove,&#34; ended up with the lowest economic growth rate in the country. In this larger context, including the chaos in the senior management team of Jinshang Bank, the shadow of coal continues to loom.
The newly appointed Deputy General Manager, Wang Qi, also transferred from the financial subsidiary of China Huaneng Group, which operates coal and power. While his resume is impressive and he is experienced, he may not be the best choice in the current poor performance of Jinshang Bank. The most direct &#34;fatal blow&#34; is that Wang Qi has almost no banking work experience
Born in 1978, Wang Qi graduated from Shandong Institute of Building Materials Industry (now known as University of Jinan) in July 2000 with a bachelor's degree in Economic Information Management.
In the first two years after graduation, Wang Qi may not have determined his career direction yet. From September 2000 to September 2002, he worked successively at Construction Bank and Qilu Petrochemical Company. One is commonly known as a &#34;golden rice bowl&#34; in the banking industry, and the other is a subsidiary of a central enterprise in a monopolistic industry, both of which are highly enviable and difficult to enter for ordinary people. However, Wang Qi was not content with being moderately well-off and actively sought progress, eventually entering the State Power Corporation's power system. In the more relationship-oriented northern region, his efforts behind the scenes were self-evident.
After grassroots training, Wang Qi served as the head of the General Manager's Office of China Huadian Finance Co., Ltd. from March 2007 to August 2008; then, he was in charge of the Human Resources Department from September 2009 to March 2013, marking a significant career advancement. Subsequently, from March 2013 to May 2014, he served as a supervisor in the Comprehensive Planning Department; from May 2014 to March 2016, he was promoted to Assistant Manager of the Settlement Business Department.
Later on, Wang Qi continued to climb the career ladder. From April 2016 to April 2018, he served as Deputy Manager of the Credit Business Department, then as Manager from April 2018 to August 2019, finally becoming the department head. From August 2019 to March 2023, he served as the Director of the Party Committee Office; from October 2019 to March 2023, he served as the Director of the Procurement Management Office, and from October 2020 to October 2021, he was seconded to Huaneng Taicang Power Plant.
Undeniably, Huaneng Finance Company's training of Wang Qi was comprehensive, and his resume was rich, covering administration, human resources, party affairs, credit business management, logistics procurement, and secondment. This breadth of experience is sufficient to qualify for higher leadership positions. However, as the saying goes, &#34;different trades have different rules.&#34; While there are commonalities across industries, there are also unique characteristics. It is not easy to be a &#34;steady performer&#34; in cross-industry appointments, and it may be overly optimistic to expect significant contributions to JINSHANG BANK's management in the current situation.
Disarray in the Senior Management Team
Nevertheless, Wang Qi's cross-industry experience is somewhat insignificant amidst the chaos in JINSHANG BANK's senior management team in recent years. Former Chairmen and Vice Presidents such as Shangguan Yongqing, Wang Junbiao, and Li Jianqiang have fallen from grace. According to data from Oriental Wealth Choice, in 2021 and 2022, a total of 7 senior executives resigned each year, accounting for 40% and 33.33% of the total number of executives respectively. From 2020 to the present, a total of 22 senior executives have left, exposing the disarray in JINSHANG BANK's senior management team.
Overview of senior executive turnover at JINSHANG BANK in recent years
Chart source: Eastmoney Choice
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First of all, it is worth mentioning that the former chairman, Shangguan Yongqing, born in 1963, served as chairman of the bank for five years. Shangguan Yongqing has many peculiarities in his education, work, and resume, such as entering Shanxi University of Finance and Economics at the age of 15, becoming the head and party secretary of Yuci Branch of Industrial and Commercial Bank of China at the age of 35.
During his tenure as chairman of Jinshang Bank, Shangguan Yongqing neglected his duties and engaged in speculation. He launched an offensive against a fallen &#34;tiger&#34; with the grace of a middle-aged woman, in order to compete with a young female star supported by that &#34;tiger&#34;. He not only spent a huge amount of money on plastic surgery and beauty treatments but also &#34;organized&#34; 12 companies to raise 390 million yuan to purchase a &#34;business jet&#34;. He then used it as his private jet, shuttling daily between China and South Korea to transport freshly squeezed milk for his beauty regimen.
As for other corrupt and illegal activities, there are too many to list. According to reports, he owns 20 properties in Los Angeles alone. After the incident came to light, investigators found 70 boxes of commemorative banknotes and coins during a search of his residence, including high-value special year commemorative banknotes, commemorative coins, brand new consecutive number banknotes, and more. Just in terms of banknotes with collection and appreciation value, the total value exceeded 1 billion yuan.
After Shangguan Yongqing, his successor Yan Jun resigned in January 2020. Tang Yiping, the former vice chairman, temporarily took over as chairman, and was later replaced by Wang Junbiao. However, Wang Junbiao served as chairman for just over a year. In April 2021, he was transferred to the position of Deputy Secretary of Changzhi Municipal Party Committee, Acting Mayor, and Secretary of the Municipal Government Party Committee. He was then investigated in September of the same year. Wang Junbiao had worked in the Shanxi Credit Cooperative System for a long time. The specific reason for his downfall is likely related to internal corruption cases.
The problems of Jinshang Bank over the years are mainly due to the chaos in the senior management team. The past is over, and we look forward to seeing whether Jinshang Bank can gradually optimize its senior management in the course of its operations, select talents, and allow capable and virtuous senior executives to play a good role!

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JINSHANG BANK recently experienced a turmoil in its senior management, with two chairmen being removed from their positions. The newly appointed vice president has a lackluster banking background. JINSHANG BANK is an institution listed on the Hong Kong Stock Exchange, with total assets of 356.43 billion yuan, operating income of 1.302 billion yuan, and a net profit attributable to shareholders of 530 million yuan. The stock price has been lukewarm since its listing, with meager trading volume. The name JINSHANG BANK is derived from the ancient Jin merchants, but the historical Jin merchants were not illustrious

JINSHANG BANK executive turmoil: Two chairmen fall from grace, new vice president lacks banking experience