3 6 Ke·2025-09-24 11:27Core Viewpoint - Postal Savings Bank of China announced the absorption and merger of its wholly-owned subsidiary, Postal Bank of China Huinong Bank, marking the exit of the second independent legal direct bank in China within a short span of three years since its establishment [1][3]. Group 1: Background and Development - The establishment of Postal Bank of China Huinong Bank was part of Postal Savings Bank's digital transformation strategy, intended to serve as a "testbed" for innovation [3][4]. - The bank was officially approved to commence operations in June 2022, but it has struggled to gain a significant presence in the market, with total assets of only 12 billion yuan and around 20 million registered users by June 2025 [3][6]. Group 2: Performance and Financials - The performance of Postal Bank of China Huinong Bank has been disappointing, with a net loss of 4.15 billion yuan in 2024, and cumulative losses exceeding 840 million yuan since its inception [6][7]. - The bank's non-performing loan ratio surged from 2.28% in 2023 to 6.66% in 2024, indicating severe credit quality issues [6][7]. Group 3: Regulatory and Compliance Issues - In July 2025, the bank faced a fine of 4.25 million yuan for violating clearing management regulations, adding to its compliance challenges [9][10]. - The high turnover in the bank's executive team, including the chairman and senior management, has contributed to operational instability [10]. Group 4: Industry Context - The direct banking model in China has faced significant challenges, with many independent legal direct banks struggling to establish themselves in a competitive environment dominated by traditional banks and fintech [12][13]. - As of July 2025, only about ten independent direct banking apps remain operational, a stark decline from their peak, indicating a consolidation trend in the industry [15].