Hangzhou United Rural Commercial Bank, known as Hangzhou United Bank, faces renewed obstacles on its path to an initial public offering. Data reveals that since last October, the bank has received two regulatory penalties totaling 121 million yuan, primarily for violations in core operations such as loan management and data reporting. Concurrently, after nine years of IPO preparations without success and amid lackluster operational performance, some of the bank's individual shareholders are intensively selling their holdings at discounted prices. Experts suggest that repeated regulatory sanctions may adversely impact the bank's IPO review process.
Over 600,000 shares were recently listed for auction on the Alibaba Auction Platform at a reduced price, yet failed to attract bidders. The platform posted details for the transfer of 627,559 shares of Hangzhou United Bank, with the online bidding scheduled from March 29 to April 8. By March 30, there were no registered bidders, though 16 individuals had set reminders and the listing had garnered 425 views. This auction followed a previous unsuccessful attempt; the starting price was lowered to 4.41 million yuan from the initial 5.1 million yuan. In recent years, Hangzhou United Bank's shares have frequently appeared on online auction platforms. Based on the first starting price of 5.1 million yuan for the 627,559 shares, the per-share price was less than 8.13 yuan. According to platform data, the bank's net asset value per share was approximately 16.55 yuan at the end of 2024, indicating a discount of nearly 50%.
Notably, Hangzhou United Bank has maintained stable dividend distributions in recent years. Specifically, dividends per share were 10% (pre-tax) with a 5% bonus share issue in 2019; 10% (pre-tax) with a 2.5% bonus issue in 2020; 10% (pre-tax) in 2021; 14% (pre-tax) in 2022; 14% (pre-tax) in 2023; and 10% (pre-tax) in 2024. An industry expert commented that investor confidence in Hangzhou United Bank is currently low, and this is not the first time the bank's shares have been auctioned at a discount. The key to evaluating a bank's investment value lies in its asset quality rather than dividends; smaller banks with poor asset quality pose risks to investors.
Public information shows that Hangzhou United Bank reported revenue of 8.69 billion yuan for the first three quarters of 2025, a decrease of 3.5% year-on-year, marking the first negative growth in recent years. Additionally, according to the bank's official performance report for 2025, the non-performing loan ratio for the group stood at 0.88% by the end of the year, up 0.01 percentage points from the end of 2024. The balance of non-performing loans increased to 3.215 billion yuan by the end of June 2025, rising 5.93% compared to the end of 2024.
On February 6, the Zhejiang Office of the National Financial Regulatory Administration imposed a penalty of 11.1 million yuan on Hangzhou United Bank and held 16 relevant individuals accountable. The penalty cited major violations including inadequate loan management and inaccurate data reporting. Merely four months prior, the bank had been fined 1 million yuan for imprudent structured deposit practices and poor management of working capital loans.
Simultaneously, compliance issues at the bank's rural subsidiary banks have frequently surfaced. In December 2024, the Jiaxing Office of the National Financial Regulatory Administration disclosed that Zhejiang Jiashan United Village Bank, a subsidiary of Hangzhou United Bank, was fined 1.4 million yuan for multiple violations. In July 2025, Zhuji United Village Bank, controlled by Hangzhou United Bank, was warned and fined 2.19 million yuan for five violations, including transactions with unidentified clients and breaches of anti-counterfeiting currency regulations. In October of the same year, Zhuji United Village Bank was again fined 550,000 yuan for imprudent management of individual business loans, misappropriation of loan funds, and issuing individual business loans to public officials, among other violations.
Experts view the compliance problems at Hangzhou United Bank as concentrated in risk control areas such as credit management and fund usage monitoring, exposing internal control weaknesses. The 11.1 million yuan penalty combined with accountability for 16 individuals clearly indicates systemic flaws in the bank's compliance framework. Issues ranging from loan management to data reporting, and extending from the head office to village banks, reflect an imbalance between the bank's drive for scale and compliance constraints.
Founded in June 2005 through the restructuring of the Hangzhou Rural Credit Cooperative Union and its 23 affiliates, Hangzhou United Bank transitioned from a rural cooperative bank to a rural commercial bank in 2011. Its largest shareholder is Hangzhou Financial Investment Group Co., Ltd., holding a 10% stake. As the bank expanded its operations, it initiated IPO procedures in 2017. Key milestones include the first IPO guidance phase in May 2017, a stall after the initial guidance round in November 2020, a restart of guidance in February 2023, and currently being in the twelfth phase of guidance.
The prolonged delay in Hangzhou United Bank's IPO is attributed to a combination of compliance issues, approval procedures, and operational pressures. Within six months, the bank received two penalties exceeding 121 million yuan, with internal control deficiencies becoming a significant hurdle for regulatory review. Procedurally, two critical approvals—the state-owned equity arrangement plan and regulatory consent for listing—remain outstanding, leaving pre-IPO conditions unresolved. Operationally, the net interest margin has narrowed for three consecutive years to 1.67%, with sluggish revenue growth.
During this critical period of IPO restart, Hangzhou United Bank also experienced changes in leadership. In April 2025, the bank's board approved Lin Shiyi as the new chairman. Previously, in November 2024, Zhang Hailin resigned as executive director and chairman, after which executive director and president Wen Yuan temporarily assumed the chairman's duties. Analysts believe that as a leading rural commercial bank in Zhejiang, Hangzhou United Bank's ability to balance compliance with growth, and scale with efficiency, will be crucial for its future success.
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