21世纪经济报道·2025-12-26 14:52Core Viewpoint - The wave of mergers and restructuring among China's small and medium-sized banks has progressed with unexpected intensity and speed, focusing on financial risk prevention and high-quality industry development in 2025 [1][2]. Summary by Sections Mergers and Restructuring Overview - As of December 26, 2025, a total of 394 banking institutions have been approved for mergers or dissolutions, doubling the total from 2024 [1]. - Between 2024 and 2025, nearly 550 banking institutions were reduced through mergers and restructuring, surpassing the total from the previous seven years [1]. - The restructuring involved 28 provinces, with Inner Mongolia leading by integrating 139 institutions, followed by Shandong (33), Henan (26), and Sichuan (25) [1][9]. Characteristics of the Restructuring - The 2025 restructuring is characterized by two significant trends: the involvement of state-owned banks in "village-to-branch" transformations and the acceleration of provincial-level reforms in the rural credit system [2]. - This transformation is not merely a reduction in numbers but a comprehensive change across various types of institutions, moving towards a quality-driven development phase [2]. Regulatory and Policy Framework - The central financial work conference in 2024 emphasized the need to "properly handle risks in small financial institutions," placing them alongside local debts and real estate as key areas for financial risk prevention [4]. - The regulatory focus has been on risk prevention and resolution, with tailored reform plans developed for different regions [5]. Achievements and Progress - The reform efforts have led to a significant increase in the disposal of non-performing assets, with over a 40% increase compared to the previous five-year period [5]. - The number of high-risk small and medium-sized banks has significantly decreased, with some provinces achieving a "dynamic zero" for high-risk institutions [6]. Integration of Institutions - The integration process has seen state-owned banks actively participating in the restructuring of village banks, providing stronger support for their transformation [11]. - By the end of 2025, 231 village banks had merged or dissolved, with a notable acceleration in the second half of the year [12]. Future Outlook - The ongoing restructuring is expected to continue, with a focus on enhancing the quality and effectiveness of the integration process [17]. - The emphasis on "reducing quantity and improving quality" will remain a core theme in the upcoming years, as the industry transitions to a more stable and effective phase [17].