The auction market frequently cools down, and the equity stakes in non-listed banks need to be reassessed.

Securities Times Reporter Xie Zhongxiang

Recently, multiple large bank equity auctions have been repeatedly sold at discounts but remain unsold.

The Securities Times reporter saw on the Alibaba Judicial Auction Platform that several banks, including Guangdong Huaxing Bank, have multiple equity stakes valued at over one hundred million yuan listed again. However, after several failed auctions, they have entered the resale process.

In the face of the sluggish market for non-listed bank equity auctions, some targets’ trustees are attempting to attract buyers with low prices as a promotional tactic. For example, on the Alibaba Judicial Auction Platform, a stake of 100,000 shares in Beijing Rural Commercial Bank is listed with a starting price of only 188 yuan, which is far below the bank’s latest net asset value of 837,000 yuan.

Multiple equity auctions have failed to sell

Recently, Jiangxi Baosheng Industrial Co., Ltd. (referred to as “Jiangxi Baosheng”) publicly listed 23.652 million shares of Jiujang Bank, which had previously failed to sell in multiple auctions and has now entered the resale process. The resale price is about 193 million yuan, approximately 8.18 yuan per share, which is about four times the bank’s latest H-share closing price of 1.81 Hong Kong dollars per share.

In October last year, Jiangxi Baosheng’s holdings of these shares were publicly listed again. The first auction had a starting price of 241.8 million yuan but attracted no bidders; the second round was lowered to 193 million yuan but still failed to find a buyer, resulting in a failed auction. As early as July to August 2021, several of Jiangxi Baosheng’s equity stakes in Jiujang Bank (with a total listing price exceeding 100 million yuan) were forcibly auctioned by the court but did not succeed. They were subsequently withdrawn after the second auction.

Besides Jiujang Bank, several stakes held by Shanghai Shenglong Investment Group in Guangdong Huaxing Bank have also gone through multiple auctions. In February this year, a stake of 90 million shares was auctioned but ended without bids, and it was re-listed recently.

In fact, among judicial auctions of small and medium-sized banks’ equity stakes, failed sales are quite common. In January this year, Zhongrong XinDa Group Co., Ltd. listed about 416 million shares of Shanxi Bank with a starting price of 417 million yuan, but it also failed to sell. In February, Tianjin Runsheng Plastic Products Co., Ltd. listed 30.6 million shares of Langfang Bank at a discounted price of 74.63 million yuan, but the auction still did not conclude successfully.

“188 yuan for 100,000 shares”

Similarly, due to low overall market transaction volume, some trustees of auctioned assets are trying to attract buyers with “low-price traffic” strategies.

The Securities Times reporter observed on the Alibaba Asset Auction Platform that several stakes in Beijing Rural Commercial Bank are either ongoing or upcoming. One listing of 100,000 shares has a starting bid of only 188 yuan. However, the deposit for this stake is 20,000 yuan, with a minimum increment of 2,000 yuan. An official involved explained to the media that setting the starting price at 188 yuan is to attract participants, and the final transaction price will definitely be higher.

As of March 8, this auction had 21 registered participants, nearly 750 set reminders, and attracted over 4,700 views. On March 5, another auction of 100,000 shares in Beijing Rural Commercial Bank with a starting price of 1,888 yuan was completed after 70 bids, closing at 388,800 yuan.

The auction announcement shows that as of the end of September 2025, Beijing Rural Commercial Bank’s net asset value per share is 8.37 yuan. Compared to 2024, the value of the bank’s equity has increased, with the end-of-year net asset per share at 7.49 yuan. According to the bank’s dividend payout data for 2024, the bank paid a cash dividend of 0.14 yuan per share (tax included). For 100,000 shares, that amounts to 14,000 yuan in pre-tax income just from dividends last year.

Liquidity issues for non-listed bank equity

Looking at small and medium-sized banks with frequent equity auctions, it’s clear that non-listed banks face poor liquidity in the auction market, making transactions difficult.

For example, according to incomplete statistics from the Securities Times, by the end of 2025, there have been 2,700 bank equity auction cases on the Alibaba judicial auction platform, with 650 resulting in successful sales. The remaining 2,050 cases were all unsuccessful due to no bids.

This means that over 75% of the bank equity listings on this platform in 2025 failed to sell, a significant increase compared to previous years. Regionally, the success rate shows a “hot in the south, cold in the north” pattern—economically developed areas like the Pearl River Delta and Yangtze River Delta have relatively better results than central, western, northern, and northeastern regions.

According to data from the National Financial Regulatory Administration, by the end of 2025, the net interest margin of Chinese commercial banks further narrowed to 1.42%, down 10 basis points from the end of Q4 2024. Non-performing loan ratios remained steady at 1.50%. Among different types of institutions, city commercial banks saw a relatively higher increase in non-performing loans, rising by 0.06 percentage points.

Sun Binbin’s team at Caitong Securities pointed out that small and medium-sized banks primarily face risks related to internal control compliance and illegal operations, and there may also be risks associated with shareholders and actual controllers in their equity structures. Additionally, during economic recovery, the transition of new and old driving forces increases operational risks for these banks. Meanwhile, in a low-interest-rate environment, narrowing interest margins reduce profitability, affecting capital adequacy and solvency.

“Short-term, the market for small and medium-sized bank equity auctions will continue to be sluggish, likely characterized by deeper discounts and shrinking transaction volumes,” said Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance. He believes that the “winter” faced by small and medium-sized bank equity auctions is a concentrated release of risks accumulated from past extensive growth models. The key to breaking this deadlock is not waiting for market recovery but through substantive risk clearing, governance restructuring, and mechanism innovation to restore investment value in small and medium-sized bank equities.