SRCB(SH:601825) Guan Cha Zhe Wang·2025-10-22 08:29Core Viewpoint - The resignation of Mr. Li Guanying from Shanghai Rural Commercial Bank's board is significant, as it alters the accounting classification of China Taiping Insurance Group's 4.3% stake in the bank, shifting it from a long-term equity investment to a financial asset under new accounting standards [5][6][9]. Group 1: Impact of Resignation - The resignation leads to a fundamental change in the accounting treatment of China Taiping's investment in Shanghai Rural Commercial Bank, moving from "long-term equity investment" to "financial asset" due to the loss of "significant influence" [5][6]. - This change is driven by the implementation of new insurance contract accounting standards (IFRS 17) and new financial instrument standards (IFRS 9) starting in 2023 [5][7]. Group 2: Accounting Logic Shift - The previous classification allowed China Taiping to recognize its share of Shanghai Rural Commercial Bank's profits or losses, emphasizing a long-term strategic investment approach [6][9]. - Under the new standards, the classification forces insurers to choose between accepting direct impacts of stock price fluctuations on profit (FVTPL) or stabilizing profit performance by storing fluctuations in equity (FVOCI) [8]. Group 3: Shanghai Rural Commercial Bank's Performance - Shanghai Rural Commercial Bank has faced operational challenges, with a 15.80 percentage point decline in its provision coverage ratio and a decrease in employee compensation despite an increase in total staff [9][10]. - The bank's retail loans have shrunk, with total loans of 774.2 billion yuan showing only a 2.51% increase, and personal loans decreasing by 1.69% [9][10]. Group 4: Strategic Shift of China Taiping - China Taiping's decision to resign its board member reflects a shift from being a strategic investor to a more passive financial investor, allowing for greater flexibility in managing its investment based on market conditions [10][11]. - Despite this adjustment, the overall enthusiasm of the insurance industry for bank stocks remains high, with a focus on high dividends, low valuations, and earnings certainty [11].