Core Viewpoint - The recent approval by the Chongqing Financial Regulatory Bureau for Harbin Bank to acquire two rural banks in Chongqing marks a significant step in the bank's expansion strategy in the southwest region, reflecting a broader trend of regional banks pursuing cross-province acquisitions to establish branches [1][5][6]. Group 1: Cross-Province Acquisitions - Harbin Bank's acquisition of Chongqing's Shapingba and Dadukou rural banks follows its earlier acquisition of Youyang Rural Bank, enhancing its presence in the region [6][31]. - This acquisition strategy is not unique to Harbin Bank; Jiangsu Bank has also successfully established a branch in Ningbo through a similar acquisition [7][32]. - The model of acquiring rural banks to establish branches has become a common approach for city commercial banks, allowing them to inherit the assets, liabilities, and customer base of the acquired banks [8][33]. Group 2: Policy Background - The regulatory environment for city commercial banks has shifted from leniency to tightening over the past decade, with significant restrictions on cross-regional operations [9][34]. - Historical regulations have limited city commercial banks from expanding beyond their local jurisdictions, with exceptions made for resolving high-risk institutions [9][34]. Group 3: Reform Wave - The ability of city commercial banks to establish branches across provinces is part of a broader reform aimed at accelerating the resolution of risks in small and medium-sized banks [10][35]. - As of mid-2025, 100 rural banks have undergone mergers or restructuring, indicating a significant increase in consolidation efforts compared to previous years [10][35]. Group 4: Regulatory Logic - Despite speculation about a loosening of cross-regional restrictions, industry professionals believe that such acquisitions will not become a standard practice and will continue to follow a case-by-case approval process [11][36]. - Regulatory bodies are expected to maintain strict oversight, ensuring that only proposals that effectively address risk and promote stable operations are approved [12][38]. Group 5: Bank Considerations - Acquiring existing rural banks allows city commercial banks to save capital and quickly gain access to established customer bases and operational networks [14][39]. - Harbin Bank reported a revenue of 7.386 billion yuan in the first half of 2025, with a net profit of 915 million yuan, highlighting the financial pressures that make acquisitions an attractive growth strategy [17][42]. Group 6: Future Trends - The trend of reducing the number of small and medium-sized banks while improving their quality is expected to continue, with a peak in mergers and restructurings anticipated in 2025 [18][45]. - The disappearance of rural banks reflects a strategic shift in the banking sector towards consolidation and enhanced risk management capabilities [20][47]. - Future acquisitions may occur, but this does not imply a complete lifting of restrictions on cross-regional operations for city commercial banks [23][49].