The auction market frequently cools down, and the equity of unlisted banks needs to be revalued.

Financial Times Reporter Xie Zhongxiang

Recently, multiple large bank equity auctions have failed to attract buyers despite multiple discounts.

The Securities Times reporter observed on the Alibaba Judicial Auction Platform that several bank equities, each valued at over one billion yuan, including Guangdong Huaxing Bank, have been re-listed but ultimately entered the auction process after multiple failed attempts.

In the face of the sluggish market for non-listed bank equity auctions, some bidders are attempting to attract attention with low starting prices as a promotional tactic. For example, the Alibaba Judicial Auction Platform listed 100,000 shares of Beijing Rural Commercial Bank with a starting bid of only 188 yuan, despite the bank’s latest net asset value being as high as 837,000 yuan.

Multiple Equity Auctions Fail to Sell

Recently, Jiangxi Baosheng Industrial Co., Ltd. (referred to as “Jiangxi Baosheng”) publicly listed 23.652 million shares of Jiujang Bank’s domestic stock. After several failed auctions, the process was converted to a private sale, with an estimated sale price of about 193 million yuan, roughly 8.18 yuan per share. This 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, with an initial auction starting at 241.8 million yuan, but no bidders participated. The second round lowered the starting price to 193 million yuan, yet no buyers emerged, and the auction failed again. As early as July to August 2021, several of Jiangxi Baosheng’s holdings of Jiujang Bank (with a combined listing price exceeding 100 million yuan) were forcibly auctioned by the court but failed, after which the auction was withdrawn.

Besides Jiujang Bank, other bank equities that have undergone multiple auctions include several holdings of Guangdong Huaxing Bank by Shanghai Shenglong Investment Group. In February, a batch of 90 million shares was auctioned but ended without bids, and was re-listed only recently.

In fact, among judicial auctions of small and medium-sized bank equities, failed sales are common. In January, Zhongrong Xin Da Group Co., Ltd. listed approximately 416 million shares of Shanxi Bank with a starting price of 417 million yuan, but the auction failed. 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 still failed to sell in the second auction phase.

“188 Yuan for 100,000 Shares”

Similarly, due to low overall market transaction volume, some bidders are trying to attract attention with low starting prices.

The Securities Times reporter saw on the Alibaba Asset Auction Platform that several Beijing Rural Commercial Bank equities are either being auctioned or about to be. One batch of 100,000 shares has a starting bid of only 188 yuan. The deposit for this auction is 20,000 yuan, with a minimum bid increment of 2,000 yuan. An auction official explained that setting the starting price at 188 yuan is meant 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 of Beijing Rural Commercial Bank with a starting price of 1,888 yuan was successfully sold for 388,800 yuan after 70 bids.

The auction notice states 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 a year-end net asset per share of 7.49 yuan. Additionally, based on the bank’s 2024 dividend payout data released last June, the bank paid a cash dividend of 0.14 yuan per share (tax included). For 100,000 shares, this amounts to a pre-tax income of 14,000 yuan just from dividends.

Liquidity Drought for Non-Listed Bank Equities

Looking at the frequent auctions of small and medium-sized banks’ equities, 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 Alibaba Judicial Auction Platform, by the end of 2025, there had been 2,700 bank equity auctions, with only 650 resulting in successful sales. The remaining 2,050 auctions ended without bids.

This means that over 75% of bank equity listings on the platform in 2025 failed to sell, a significant increase compared to previous years. Regionally, the auction results show a “hot south, cold north” pattern—more successful in economically developed areas like the Pearl River Delta and Yangtze River Delta, and less so in central-western, North China, and northeastern regions.

According to data from the National Financial Regulatory Administration, by the end of 2025, China’s commercial banks’ net interest margin 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.

Caitong Securities analyst Sun Binbin’s team 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 involving shareholders and actual controllers within their equity structures. Additionally, as the economy recovers and new and old drivers of growth shift, these banks face increased operational risks. Under the low-interest-rate environment, narrowing interest margins reduce profitability, which also impacts their capital adequacy and solvency.

“In the 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 Bo 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 result of risks accumulated from past extensive growth models. The key to breaking this cycle 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.