Chinese RCBs: Two Bailouts. How Many More At Risk?

• Last week, CICC Hong Kong and SOE Jilin Financial Holding Group tabled a rescue offer for Jilin Bank (6122 HK), as discussed in Jilin Bank (6122 HK): Another Hobson's Choice

• This follows a similar bailout of Bank Of Jinzhou (416 HK) in early 2024, as detailed in Bank of Jinzhou (416 HK) To Be Taken Private.

• Tarring the sector with same brush is potentially oversimplifying the situation. But the issues faced by Jilin Bank and BoJ are unlikely to be isolated. Below I dig deeper.

This insight is (mostly) table/chart heavy. And largely objective.

There can be no guarantee/certainty why one bank may need to hoist the white flag, while another does not.

All data is either sourced from CapIQ, the SFC, or HKEx annual reports. Where outside sources are used, I've linked those in.

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This insight is broken down into eleven different sections:

1. The List

2. Price Performance

3. Trailing P/B - Over Five Years

4. The Key Financial Indicators

5. Loans, Assets And ROE

6. Net Interest Income/Margins

7. Loan/Geographical Exposure

8. Short Interest

9. Suspension?

10. Anything Else?

11. Conclusions

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1. The List

• I've pieced together 33 listed Chinese rural commercial banks (RCBs).

• No doubt I've missed a name or two.

• Those coloured in peach - all 18 of them - are listed in Hong Kong.

• HK-listed banks trade at a discount to its PRC-listed counterparts, on a trailing P/B metric; but offer superior yields.