Bei Jing Shang Bao·2025-10-12 13:32Core Viewpoint - The trend of state-owned banks transforming village banks into branches is gaining momentum, with Agricultural Bank of China recently acquiring Zhejiang Yongkang Rural Bank and establishing three branches, marking its second such approval this year [1][3][4]. Group 1: Recent Developments - On October 11, the National Financial Regulatory Administration approved Agricultural Bank's acquisition of Zhejiang Yongkang Rural Bank, allowing it to establish three branches [1][3]. - In September, Agricultural Bank was also approved to acquire Xiamen Tong'an Rural Bank and convert it into a branch [3][4]. - Other state-owned banks, including Industrial and Commercial Bank of China and Bank of Communications, have also engaged in similar transformations this year [4][5]. Group 2: Industry Context - The transformation from independent village banks to branches of major banks is a response to regulatory calls for reform and aims to enhance service delivery in rural areas [1][5]. - The shift reflects a broader restructuring of county-level financial supply, as village banks have faced challenges such as governance issues and declining agricultural loan ratios [6][7]. Group 3: Implications for State-Owned Banks - The integration of village banks into larger banking systems is expected to improve risk management and enhance the financial stability of rural banking services [5][8]. - State-owned banks can leverage their financial strength and management expertise to better serve rural economies and support agricultural development [5][8]. Group 4: Challenges and Recommendations - The reform process faces challenges, including the complexity of shareholder rights and the management of legacy bad assets from village banks [8]. - Recommendations include developing clear plans for shareholder rights and employing various strategies to address non-performing assets [8].