Two rural lenders in Shandong province have seen their ratings revoked by a leading Chinese credit agency after failing to file annual reports for several years running.
Golden Credit Rating has just announced that it has terminated its credit ratings and related debt ratings for Shandong Guangrao Rural Commercial Bank (山东广饶农商行) and Shandong Zouping Rural Commercial Bank (山东邹平农商行), after both lenders failed to disclose their annual reports for three consecutive years, or provide related materials necessary for ratings purposes.
Guangrao Rural’s last annual report was for 2017, with the lender announcing in April 2019 that it would delay the release of its 2018 annual report until 30 June 2019.
In August 2020 Guangrao Rural announced further delays in the release of its performance results due to the COVID-19 pandemic, setting the date of 30 April 2021 for the release of its 2018 and 2019 annual reports.
Zouping Rural has made similar announcements, deferring the release of its annual reports on the grounds of the COVID-19 pandemic in 2020.
In its 2017 annual report Guangrao Rural reported a 14.73% YoY decline in its full-year operating revenues, as well as an increase in its non-performing loan balance of 1.687 billion yuan, for a rise in its NPL ratio to 13.90% from 2.47% the year previously. The bank’s provisions coverage ratio dropped from 173.36% to 33.16%.
In 2017 Zouping Rural reported full-year net profits of 100,000 yuan, and a surge in its NPL ratio to 9.28% from 2.43% the year previously. Its provisions coverage ratio fell to 59.28% from 215.3%, while its capital adequacy ratio fell to 7.12% from 11.73%, putting it below regulatory requirements.
A total of 13 banks in China have had their ratings terminated by Chinese credit agencies according to a report from 21st Century Business Herald, including one other Shandong province rural lender, Shandong Boxing Rural Commercial Bank (山东博兴农商行).
Since the start of 2021 three rural commercial banks in China have had either their ratings or outlooks downgraded by credit agencies, including Shanxi Yuci Rural Commercial Bank (山西榆次农商行), Guangzhou Rural Commercial Bank (广州农商行) and Guizhou Weng’an Rural Commercial Bank (贵州瓮安农商行).