Jin Rong Shi Bao·2025-11-20 13:07Core Viewpoint - The recent approvals by the National Financial Supervision Administration for several banks to acquire their affiliated rural banks and convert them into direct branches signify a shift from quantity expansion to quality enhancement in the rural banking sector [1][2]. Group 1: Recent Developments - Multiple cases of "village to branch" transformations have been approved, indicating a significant acceleration in the reform and restructuring of small and medium-sized banks [2]. - In November, Shanghai Pudong Development Bank successfully acquired two rural banks, converting them into branches, showcasing a trend among various banking institutions to engage in mergers and acquisitions of rural banks [2]. - The restructuring methods "village to branch" and "village to division" are becoming mainstream, allowing banks to absorb rural banks and enhance their operational capabilities [2][3]. Group 2: Strategic Implications - The absorption of rural banks into larger banking institutions enhances service capabilities and risk resilience for rural banking services [3]. - For the parent banks, the restructuring expands their business scope and allows for the potential establishment of new branches in areas where they previously had no presence [3]. Group 3: Policy and Market Dynamics - The acceleration of rural bank integration aligns with regulatory directives aimed at reducing the number of financial institutions while improving service quality [4]. - As of mid-2025, the number of rural banks is projected to decrease to 1,440, reflecting a significant reduction in the sector, which is part of a broader strategy to enhance service quality through consolidation [4]. - The integration of rural banks is not merely about reducing the number of branches but represents a strategic shift towards more focused and quality-driven financial services [4].