On March 1, Hangzhou Bank (600926.SH) issued an announcement showing that its largest shareholder, Commonwealth Bank of Australia (hereinafter referred to as “CBA”) and Hangzhou Urban Construction Investment Group Co., Ltd. (hereinafter referred to as “Hangzhou”) City Investment”) and Hangzhou Communications Investment Group Co., Ltd. (hereinafter referred to as “Hangzhou Traffic”) signed a share transfer agreement on the evening of February 28.
According to the agreement, CBA will transfer 296,800,000 shares each of which it holds in Hangzhou Bank to Hangzhou Chengtou and Hangzhou Traffic Investment by agreement transfer, accounting for 5% of the total issued ordinary shares of Hangzhou Bank, and a total of 10%. The transaction is still subject to regulatory approval procedures in accordance with the law.
According to the announcement, CBA is the largest shareholder of Bank of Hangzhou, holding 15.57% of the shares. If the transaction is completed, CBA will no longer be the largest shareholder of Bank of Hangzhou, but still hold more than 5% of the shares.
“This time the local state-owned capital has been transferred to CBA’s shares of Bank of Hangzhou, and the two municipal state-owned enterprises have entered the top ten shareholders, which will not only further optimize the shareholder structure of Bank of Hangzhou, but also hope to expand Bank of Hangzhou’s services for people’s livelihood, Financial services in infrastructure construction and other fields will further serve to ensure the high-quality development of the regional real economy.” A relevant person from Hangzhou Bank told the 21st Century Business Herald reporter.
Why did CBA transfer 10% of its shares?
CBA is one of the leading full-service financial services institutions in the Australian market, operating primarily in Australia and New Zealand. Historical information shows that CBA is a foreign strategic investor introduced by Hangzhou Bank in 2005, and participated in the bank’s capital increase and share expansion in 2009 and 2014, so it has long been the largest single-family shareholder of the bank. Before this transaction, CBA held 923 million shares of Hangzhou Bank, accounting for 15.57% of the shares, all of which were tradable shares.
According to the announcement, for this share transfer, each transferee will purchase CBA’s shares of Hangzhou Bank at a price of RMB 13.94 per share, and the total price of this share transfer is RMB 8,274,784,000. The total price paid was RMB 4,137,392,000 respectively. As of the close on February 28, the share price of Bank of Hangzhou was 14.32 yuan per share.
However, the announcement did not explain why CBA transferred the shares of Bank of Hangzhou. Qiu Guanhua, director of Zheshang Securities Research Institute, analyzed that it was attributable to the adjustment of CBA’s own business strategy: First, its own operation was in trouble. Affected by the lower interest rate in Australia and the weak economic growth, CBA’s ROE fluctuated and declined since 2014. 18.3% fell to 13.5% in 2021; the second is the need for business model transformation. In the face of operational difficulties, CBA proposed in 2018 to streamline operations by selling foreign investment and other forms. Since 2018, CBA has continued to shrink foreign investment and has sold Its equity in companies such as Bank of Communications Kanglian and the Australian Investment Exchange, as well as its life business in Indonesia, Australia and other places.
It is worth mentioning that after the completion of the share transfer, CBA not only retained 5.57% of the shares, but also locked this part of the shares for three years. A relevant person from Bank of Hangzhou said that although the proportion of CBA’s shares in Bank of Hangzhou has decreased, it still holds 5.57% of the shares, which reflects the continued optimism of foreign shareholders on the prospects of China and Bank of Hangzhou.
What is the new layout after the increase of state-owned assets?
According to public information, Hangzhou Chengtou and Hangzhou Exchange, which have been assigned CBA’s shares of Hangzhou Bank, are state-owned enterprises in Hangzhou and are large-scale investment and operation entities in Hangzhou’s urban infrastructure. Hangzhou Municipal Government, Hangzhou State-owned Assets Supervision and Administration Commission They are the largest shareholders of the two companies, respectively.
“After the completion of the transfer of the above-mentioned shares, the shareholder structure of Bank of Hangzhou has been further optimized, which will help it strengthen financial services for the real economy and promote the better realization of its strategic planning goals.” A relevant person from Bank of Hangzhou told the 21st Century Business Herald reporter, such as It is expected to expand the financial services of Bank of Hangzhou in the fields of people’s livelihood services and infrastructure construction by giving full play to the synergistic advantages of shareholders, and further serve to ensure the high-quality development of the regional real economy.
If the above transaction is completed, Hangzhou Finance Bureau will become the largest shareholder of Bank of Hangzhou, holding 11.86% of the shares. According to the third quarterly report of Bank of Hangzhou in 2021, Hangzhou Caikai Investment Group Co., Ltd. is the person acting in concert with the Hangzhou Municipal Bureau of Finance, and its shareholding ratio is 6.88%, making it the fourth largest shareholder.
As of now, Hangzhou Bank has not released a 2021 performance forecast. Its third quarterly report for 2021 shows that as of the end of September 2021, the bank’s total assets were 1.33 trillion yuan, the non-performing ratio was 0.90%, and the provision coverage ratio was 559.42%; the first three quarters of 2021 achieved operating income, attributable to listed companies The net profit of shareholders was 22.377 billion yuan and 7.036 billion yuan respectively, with a growth rate of 19.97% and 26.16%.
Guo Qiwei, chief analyst of the banking industry of Tianfeng Securities, said that there is no need to worry about CBA’s reduction of Hangzhou Bank’s shares. This reduction is due to CBA Bank’s own strategy and business adjustment. The remaining shares are locked for three years. It shows that it is still optimistic about the company’s prospects. The new round of strategic planning from 2021 to 2025 will focus on the “2255” strategy, with “bigger retail” and “optimizing small and micro businesses” as growth poles. The optimization of the structure will be accelerated. At the same time, based in Hangzhou, the Company will be deployed in a developed economic circle, rooted in the fertile soil for the development of wealth management and small and micro businesses, and has taken the lead in clearing risks. space
(Author: Li Yuan Editor: Zeng Fang)