Xin Lang Cai Jing·2025-09-24 03:05Core Viewpoint - China Postal Savings Bank announced the absorption and merger of its wholly-owned subsidiary, Postal Savings Bank of China Huinong Bank, to optimize management and business structure, aiming for strategic integration and resource allocation [1] Group 1: Financial Performance of Postal Savings Bank of China Huinong Bank - Since its establishment on January 7, 2022, Huinong Bank has faced continuous losses, with total losses amounting to 9.58 billion RMB since inception [1][2] - By the end of 2022, Huinong Bank reported total assets of 7.022 billion RMB and a net asset of 4.838 billion RMB, with a net profit of -162 million RMB [1] - In 2023, total assets increased to 14.986 billion RMB, but net assets fell to 4.574 billion RMB, with a net profit of -263 million RMB, indicating an expanding loss [1] - The situation worsened in 2024, with total assets dropping to 12.828 billion RMB and a net profit of -415 million RMB [1] - As of mid-2025, total assets were 12.005 billion RMB, with a net profit of -118 million RMB, although losses were reduced by 38.74% year-on-year [1] Group 2: Challenges Faced by Independent Direct Banks - The merger reflects broader challenges faced by independent direct banks, which struggle with customer acquisition and profitability [2] - Independent direct banks are experiencing intense competition from both their parent banks and larger banks, leading to internal conflicts [3] - The high costs associated with technology investment and customer acquisition hinder the ability of independent direct banks to achieve economies of scale [3] - The business model of purely online operations has limitations in serving small and micro enterprises, leading to product homogenization with traditional banks [3] Group 3: Strategic Implications for Postal Savings Bank - The merger is a rational adjustment based on financial returns and strategic effectiveness, signaling a shift in focus towards internal capability development rather than merely establishing new entities [3] - The goal is to integrate Huinong Bank's operational experience and technology into the parent bank to enhance overall digital transformation [3] - The success of digital banking will depend on the internalization and reconstruction of capabilities rather than the mere establishment of new banks [3]