BANK OF SUZHOU(SZ:002966) Xin Lang Cai Jing·2025-12-19 02:17Core Viewpoint - Suzhou Bank is facing significant scrutiny regarding its risk management system due to two recent incidents: a lawsuit related to early loan recovery and the unexpected resignation of its long-serving risk director, highlighting the need for optimization in its risk control processes [2][9]. Loan Recovery Incident - On December 3, Suzhou Bank's Wuxi branch filed a lawsuit against Xuelang Environmental Technology Co., seeking to recover approximately 49.01 million yuan (about 7 million USD) in loans due to a financial contract dispute [10][11]. - The bank had initially signed an 80 million yuan (about 11.5 million USD) loan agreement, disbursing 60 million yuan (about 8.6 million USD), with a maturity date set for December 14, 2025 [10]. - Following Xuelang's announcement of a pre-restructuring application on November 19, Suzhou Bank opted to recover the loan early to mitigate bad debt risks, leading to the current legal dispute [10][11]. - The bank's recovery efforts have proven ineffective, with only 357.16 thousand yuan (about 51 thousand USD) available in frozen accounts, significantly lower than the claimed amount [11]. Risk Director Resignation - On December 11, Suzhou Bank announced the resignation of its risk director, Hou Bin, who stepped down for age-related reasons, despite being below the legal retirement age [12][13]. - Hou Bin has been a key figure in the bank's risk management since 1999, contributing to its development and risk management framework for over 12 years [12][13]. - The timing of his resignation coincides with the loan recovery incident, raising concerns about the bank's risk management adjustments [12][13]. Asset Quality Indicators - As of the first half of 2025, Suzhou Bank reported a non-performing loan balance of 3.012 billion yuan (about 430 million USD), an increase of 247 million yuan (about 35 million USD) from the previous year [13][14]. - The overdue loan balance reached 3.591 billion yuan (about 515 million USD), with a year-on-year increase of 140 million yuan (about 20 million USD) [13][14]. - Despite maintaining a low non-performing loan ratio of 0.83% and a high provision coverage ratio of 420.59%, structural risks are evident in the bank's asset quality [13][14]. Regional and Sectoral Risk Analysis - The loan balance in Suzhou, the bank's core business area, accounts for 55.88% of total loans, with a non-performing loan rate rising to 0.80%, while other regions in Jiangsu saw a decrease in non-performing rates [13][14]. - High-risk sectors include agriculture, manufacturing, and wholesale/retail, with non-performing loan rates of 1.54%, 1.16%, and 0.94%, respectively, indicating vulnerabilities in key investment areas [13][14]. Overall Performance - For the first three quarters of 2025, Suzhou Bank reported total assets exceeding 776.04 billion yuan (about 111.5 billion USD), reflecting an 11.87% year-on-year growth, and a net profit of 4.477 billion yuan (about 640 million USD), up 7.12% [14][15]. - The dual challenges of the loan recovery incident and leadership changes in risk management underscore the urgent need for the bank to enhance its risk control processes and fill key personnel gaps [14][15].