Chang Jiang Shang Bao·2025-10-19 23:33Core Insights - The reform of China's rural financial system has entered a new phase, with significant integration efforts by state-owned banks, particularly the Agricultural Bank of China, which has recently been approved to incorporate 192 branches from rural commercial banks and credit cooperatives [2][5][6] Group 1: Integration of Rural Financial Institutions - In the past month, the Agricultural Bank of China has received approval to rename and integrate 192 branches from various rural financial institutions, marking a critical step in enhancing the stability of local financial resources [2][5] - The integration includes branches from banks such as Yanbian Rural Commercial Bank and Jilin Longjing Rural Commercial Bank, which have been renamed to reflect their new affiliation with the Agricultural Bank [3][4] - This consolidation is part of a broader trend where state-owned banks are actively participating in the restructuring of local rural financial systems, with over ten provinces implementing reform plans since 2022 [5][6] Group 2: Role of State-Owned Banks - State-owned banks are transitioning from traditional minority shareholding to deeper integration through full ownership and operational control, which is seen as a core strategy for risk mitigation and system restructuring [6][7] - The "village to branch" model has emerged as a primary method for state-owned banks to engage in the reform of local small banks, allowing for rapid expansion of service networks and stabilization of regional financial order [6][7] - As of mid-2025, the Agricultural Bank of China had 22,900 domestic branches, including various rural banks under its control, indicating a significant expansion of its operational footprint [7] Group 3: Overall Impact on the Banking Sector - Since 2025, over 300 small and medium-sized banks have been dissolved, merged, or deregistered, reflecting a significant contraction in the banking sector [8] - The number of village banks in China has decreased to 1,440 by mid-2025, down by 98 from the end of 2024, highlighting the ongoing consolidation trend within the rural banking landscape [8]