A 13.08% opposition vote ratio: at the first interim shareholders' meeting of Suzhou Rural Commercial Bank in 2026, the proposal to absorb and merge Zhangjiagang Yunchuang Village Bank was ultimately passed, yet this voting outcome has drawn market attention.
Notably, this is not an isolated case. Previously, during similar village bank merger proposal votes, Guiyang Bank and Guangzhou Rural Commercial Bank also encountered a high opposition rate of 19.07% and an approval rate of 83.33%, respectively. These figures collectively point to a noteworthy trend: against the backdrop of preventing and resolving financial risks and advancing village bank reform, the market-based bargaining mechanism in the merger process is taking effect. This serves as both a test of the banks' corporate governance standards and an indication of the capital market's gradual maturation.
The reform of village banks continues to advance, but disagreements during shareholder voting are becoming a new variable on the path to mergers and acquisitions. The target of Suzhou Rural Commercial Bank's absorption merger—Zhangjiagang Yunchuang Village Bank—appears financially attractive. As of the end of 2024, the bank had total assets of 537 million yuan, an annual net profit of 20.33 million yuan, a non-performing loan ratio controlled at a low level of 0.73%, and a provision coverage ratio as high as 930.51%.
According to the merger plan, Suzhou Rural Commercial Bank will acquire all equity of this village bank, which will be converted into a branch after the absorption merger. Zhangjiagang Yunchuang Village Bank will be dissolved and its legal person status cancelled, with all its business, assets, creditor's rights and debts, and other rights and obligations legally assumed by Suzhou Rural Commercial Bank.
"Through this absorption merger, we can further integrate operational resources and optimize the branch network layout," Suzhou Rural Commercial Bank stated previously.
However, this seemingly win-win transaction encountered noticeable shareholder resistance.
A senior banking analyst pointed out that shareholder objections may stem from multiple considerations. On one hand, the rationality of the merger pricing is under scrutiny, with minority shareholders questioning the efficiency of capital use. On the other hand, the trend towards decentralized ownership structures in banks has led to more diverse interest demands from different shareholder groups.
He stated that in the current environment, management focuses more on enhancing scale effects and risk resilience through integration, whereas minority shareholders are more concerned with short-term returns and the immediate impact of the merger on earnings per share. This divergence in objectives is the root cause of the disagreement.
Disagreements between shareholders and management over merger matters are gradually becoming normalized. In November 2025, although Guiyang Bank's proposal to acquire Xifeng Development Village Bank was passed, the opposition vote ratio was as high as 19.07%, with the combined votes of minority shareholders opposing and abstaining reaching 27.37%.
Unlike the Suzhou Rural Commercial Bank case, the target acquired by Guiyang Bank was loss-making. Disclosures show that Xifeng Development Village Bank is an associate of Guiyang Bank, established in June 2011 with a registered capital of 600 million yuan; Guiyang Bank holds a 37.4% stake. As of the end of the first half of 2025, this village bank had total assets of 422 million yuan, deposit balances of 293 million yuan, loan balances of 145 million yuan, and reported a net loss of 3.3199 million yuan for the period, indicating operational pressure.
The case of Guangzhou Rural Commercial Bank is also representative. In June 2025, several of its proposals to absorb and merge Xingning Zhujiang Village Bank, Heshan Zhujiang Village Bank, and Shenzhen Pingshan Zhujiang Village Bank failed to achieve unanimous approval. Specifically, the proposals for absorbing Xingning Zhujiang Village Bank and Heshan Zhujiang Village Bank received approval rates of 90.92% each, with abstention rates of 1.63% and opposition rates of 7.45%. For the proposal to absorb Shenzhen Pingshan Zhujiang Village Bank, the abstention rate reached 9.22%, while the approval rate was 83.33%.
It is noteworthy that Guangzhou Rural Commercial Bank itself is facing operational pressures. As of the end of September 2025, the bank reported revenue of 11.02 billion yuan for the first three quarters, a year-on-year decrease of 2.35%; net profit was 1.722 billion yuan, down 18.73% year-on-year.
"With the improvement of capital market systems and deeper investor education, the awareness of rights protection among minority shareholders has significantly increased," the aforementioned analyst noted. Against the backdrop of the new Company Law, channels for shareholders to participate in corporate governance have become more accessible, and using voting rights to express dissent has become an important checks-and-balances mechanism.
Bank mergers are no longer just about asset integration but also a process of博弈 among different stakeholders. Management needs to more thoroughly demonstrate the necessity and feasibility of the merger strategy to gain shareholder support.
The integration of village banks involves complex issues of value assessment and risk control. The analyst believes that merger pricing is one of the core points of contention. Valuing loss-making institutions is particularly challenging, and balancing the interests of original shareholders with those of the acquirer requires professional solutions.
Regarding risk management, banks need to focus on three key dimensions:
Capital adequacy management is the primary consideration. Merger activities directly consume capital, and acquisitions of village banks in poor operational condition, in particular, can exert sustained pressure on capital adequacy ratios. Banks need to support mergers through diversified capital replenishment tools.
Cultural integration and talent retention are equally critical. Village banks typically possess flexible operational mechanisms and localized advantages. Preserving these strengths within the standardized management framework of a larger bank requires refined integration strategies. Proper arrangements for employee placement and incentive mechanisms directly impact post-merger operational efficiency.
Strategic alignment affects long-term value. Originally serving specific regions and customer groups, whether village banks can maintain their business characteristics and achieve synergies with the parent bank's strategy after a merger is an important criterion for measuring its success.
The banking analyst emphasized that the depth of due diligence determines the success or failure of a merger. Beyond financial metrics, non-financial factors such as the regional economic environment, customer structure quality, and corporate governance standards also require comprehensive assessment. High-quality merger targets can bring synergies in network and customer resources, while problematic targets might become new sources of risk.
As the reform of village banks deepens, shareholder disagreements during mergers will become more commonplace. Banks need to establish more transparent decision-making mechanisms to find a balance between strategic positioning and shareholder interests. At the regulatory level, there is also a need to improve valuation guidelines and communication processes to provide the market with clearer expectations.
"The integration of village banks is not only a process of risk resolution but also a comprehensive test of the banking industry's governance capabilities. Shareholders using their voting rights to express their demands signifies that China's banking industry is moving towards a more mature stage of development," the analyst concluded.
