Jilin Province's state-owned capital is set to become the largest shareholder of Jilin Yilian Bank, a move confirmed by multiple sources. According to informed individuals, the process is currently undergoing legal procedures. The former major shareholder's equity will be transferred to Jilin Financial Holding Group Co., Ltd., while Meituan will retain its position as the second-largest shareholder. Following the state capital's entry, the bank may initiate a new round of capital increase to strengthen its financial foundation.
Since 2024, several private banks have introduced local state capital. Market analysts view the state investment in Yilian Bank as evidence of a growing trend where state capital helps private banks mitigate shareholder risks and improve corporate governance.
As the first private bank in Northeast China and one of only four internet-based private banks in the country, Jilin Yilian Bank has attracted significant attention since its establishment in 2017, thanks to its rare nationwide internet banking license and backing from Meituan.
In recent years, due to shareholder risks, profitability pressures, and regulatory changes, the bank has entered a critical phase of equity and strategic adjustment.
Jilin Yilian Bank was founded by seven private enterprises with a registered capital of 3 billion yuan. The original largest shareholder was Jilin Shengzhuo Investment Co., Ltd., holding a 30% stake, while the second-largest shareholder was Jilin Sankuai Technology Co., Ltd., a subsidiary of Meituan, with a 28.5% stake. Leveraging shareholder resources and digital capabilities, the bank quickly built an online business system, becoming a representative of the internet-based model among private banks.
However, as the former major shareholder faced external operational challenges, risks began to emerge. Under the new arrangement, Jilin Financial Holding Group will take over the equity held by Jilin Shengzhuo Investment. Established in February 2015, Jilin Financial Holding Group is a state-owned financial investment enterprise approved by the Jilin Provincial Government. The entry of this state-owned financial platform will fundamentally alter the bank's ownership structure.
Amid these equity adjustments, Yilian Bank's operational pressures have become more apparent. In 2024, the bank reported revenue of 1.091 billion yuan, a year-on-year increase of 2.47%, but its net profit attributable to shareholders was -590 million yuan, down 520.10% compared to the previous year. The bank has not yet released its 2025 annual report.
Previously, Yilian Bank conducted a capital increase when its capital adequacy ratio approached the regulatory minimum, temporarily easing capital pressures. The ratio declined from 22.67% in 2018 to 11.07% in 2019, and further to 10.64% by the third quarter of 2020, close to the regulatory threshold of 10.5%. On December 21, 2020, financial regulators approved a proportional capital increase plan where all seven shareholders subscribed according to their original stakes, preserving the ownership structure without dilution.
According to sources, following the state capital's entry, Yilian Bank is likely to launch a new capital increase plan within the year, aligning with the new shareholder's arrival and risk resolution to further bolster capital strength and enhance risk resilience.
The trend of state capital acquiring stakes in private banks has gained momentum since 2024. Wuxi Xishang Bank, Jiangxi Yumin Bank, and Anhui Xin'an Bank have all introduced local state capital.
In April 2025, the National Financial Regulatory Administration approved Wuxi Guolian Development (Group) Co., Ltd. to acquire equity in Wuxi Xishang Bank, with the transfer completed in August of the same year. Guolian Group, a state-owned capital platform under the Wuxi State-owned Assets Supervision and Administration Commission, acquired a 25% stake, becoming the bank's largest shareholder.
In November 2024, the regulator approved equity changes at Anhui Xin'an Bank. Three local state-owned enterprises—Hefei Xingtai Financial Holding, Anhui Construction Engineering Group, and Hefei High-tech Holding—collectively acquired 51% of the bank's shares, achieving absolute state control.
In the same month, Sichuan State-owned Business Investment Group completed the acquisition of Chengdu Hongqi Chain, the third-largest shareholder of Sichuan Xinwang Bank with a 15% stake, giving Sichuan state capital an indirect stake in the bank.
On April 21 this year, two equity auctions for Jiangxi Yumin Bank were concluded. The entire stake held by the former second-largest shareholder, Jiangxi Boneng Industrial Group, was split and acquired by state-owned platforms in Nanchang. Following Nanchang Financial Holding Co., Ltd.'s acquisition of a 30% stake in August 2024, state ownership in Yumin Bank rose to 59.5%, transitioning from private to absolute state control.
Since the first batch of pilot private banks was established in 2014, the number has grown to 19, playing a significant role in inclusive and digital finance. However, after 12 years of development, operational performance among private banks has diverged significantly, with some facing shareholder-related challenges.
Dong Ximiao, Chief Economist at Zhaolian, noted that small and medium-sized banks, including private banks, are essential to China's financial market and banking system. However, overall, these banks face declining competitiveness, increasing operational pressures, and issues such as weak risk resilience, imbalanced asset-liability structures, singular profit models, narrow capital replenishment channels, and inadequate corporate governance with insufficient checks and balances.
Market analysis suggests that state capital infusion directly addresses rapid capital replenishment, risk resilience, and corporate governance optimization. Previous cases show that after state capital entry, several private banks have seen significant improvements in capital adequacy ratios, steady asset growth, and enhanced operational efficiency.
Dong emphasized that local governments have taken on greater responsibilities in regional financial supervision and risk management. Amid current economic pressures, local state-owned capital demonstrates higher willingness and capacity to invest in private banks compared to private capital. Therefore, local governments promoting state capital infusion is a practical choice. This move helps optimize ownership structures, stabilize development expectations, and integrate regional resources to strengthen synergy between banks and shareholders. However, the actual impact of state control on private banks' operations and development requires close monitoring.
Dong added that while state capital investment or control will enhance private banks' capital strength, local state-owned entities must respect the banks' independent legal status and avoid interfering in daily management. If local governments recommend board members or executives, or state-owned departments set performance targets, these actions must comply with laws, regulations, and corporate governance procedures, exercising shareholder rights through general meetings and boards rather than direct intervention.
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