Henan Rural Commercial Bank Absorbs Nine Rural Credit Institutions, Capital Rises to RMB 99.69 Billion

The Henan bureau of the National Financial Regulatory Administration has approved Henan Rural Commercial Bank Co. , Ltd. to raise its registered capital by RMB 8.047 billion through absorption mergers, increasing it from RMB 91.638 billion to RMB 99.686 billion. This marks the third round of large-scale institutional consolidation since the bank commenced operations in February 2025, with this round covering nine rural credit institutions across Hebi and Luohe. The Henan rural credit system has now absorbed more than 100 institutions over two years. Following the capital increase, Henan ranks tenth among national banking institutions by registered capital, and exceeds Inner Mongolia Rural Commercial Bank, which is second among rural commercial banks with registered capital of RMB 58.017 billion, by more than RMB 40 billion.

National rural credit reforms show that provincial rural commercial banks adopting the unified legal person model generally carry larger registered capital. Inner Mongolia has RMB 58.017 billion, Gansu RMB 44.949 billion, Xinjiang RMB 34.888 billion, Jilin RMB 34.628 billion, Hainan RMB 22.021 billion, and Liaoning RMB 20.789 billion. By contrast, banks adopting the rural commercial union model have relatively lower registered capital: Zhejiang RMB 5 billion, Jiangsu RMB 7.7 billion, Sichuan RMB 22 billion, and Guizhou RMB 10.458 billion. The gap stems primarily from differing corporate governance structures between the two models.

National Financial Regulatory Administration data show that at end-2025, the average capital adequacy ratio of rural commercial banks stood at 13.18%, below the averages of large banks and joint-stock banks, while the non-performing loan ratio was 2.72%, higher than large banks, joint-stock banks and city commercial banks. The rural credit system has long been characterized by small institutional scale and dispersed risk; some county-level institutions carry elevated non-performing loan ratios and large capital gaps, requiring concentrated disposal of non-performing assets and capital replenishment to meet regulatory requirements during restructuring. As of end-June 2026, the Henan rural commercial banking system held deposit balances of RMB 2.45 trillion, accounting for one-fifth of the province's total, and loan balances of RMB 1.24 trillion, one-seventh of the province's total. The bank's total assets stood at RMB 2.69 trillion.

Across provincial rural commercial banks already established nationally, shareholders are predominantly provincial fiscal authorities and provincial state-owned enterprises, with local government special bonds serving as an important funding source, typically injected through provincial financial holding companies. During the formation of Gansu Rural Commercial Bank, Gansu Financial Holding injected RMB 24 billion in special bond funds, acquiring a 53.43% stake in total share capital and achieving absolute control. The establishment of Liaoning Rural Commercial Bank, Jilin Rural Commercial Bank and Guangxi Rural Commercial Union Bank also received special bond support. As of end-2024, sample banks with special bond support recorded an average capital adequacy ratio of 13.41%, a core Tier-1 capital adequacy ratio of 10.31%, and a non-performing loan ratio of 2.73%, markedly lower than in 2020.

Under the roadmap for Henan's rural credit reform, at least 26 institutions across Luoyang, Zhumadian and Xuchang still await absorption and merger.