Langfang Bank has once again found itself on the auction block.
However, this time there is a slight difference: the entity putting Langfang Bank up for auction is another city commercial bank—Shengjing Bank.
Due to their shareholder backgrounds, the two city commercial banks could be described as "fellow sufferers in adversity." Shengjing Bank's former major shareholder was Evergrande Group, while Langfang Bank's former major shareholder was China Fortune Land Development. As their respective major shareholders were successively taken to the "ICU," both banks were taken over by local state-owned capital, which began cleaning up old accounts and paying for past actions.
Now, this pair of "companions in misfortune" appear together on the auction block. However, one is the entrusting party (creditor) of the auction, while the other is the asset being auctioned.
The prospects for this auction are hardly optimistic. Recently, there have been multiple auctions of Langfang Bank equity, most of which ended in failed sales. This indicates that despite cutting ties with the past, changing shareholders, and replacing senior management, Langfang Bank's equity remains unpopular.
Whether risk isolation can be achieved by auctioning off the equity of small and medium-sized banks to pay debts also tests the overall risk control level of the banking industry.
**Langfang Bank on the Auction Block**
The latest information from judicial auction platforms shows that the Beijing Financial Court will publicly auction a 2.66% equity stake in Langfang Bank held by Beijing Oriental Baoye Investment Co., Ltd. (hereinafter referred to as "Oriental Baoye") on February 9, 2026, corresponding to a subscribed capital contribution of 153.83 million yuan.
The assessed value of this lot is 348 million yuan, with a starting price set at 244 million yuan, equivalent to 1.58 yuan per share, which is significantly lower than the starting price per share in many previous auctions.
The root cause of this auction is a financial loan contract dispute. The applicant for enforcement, Shengjing Bank's Beijing Zhongguancun Branch, has civil disputes with Oriental Baoye, Beijing Golden Century Hotel, and several other companies. The case number is (2024) Jing 74 Zhi Hui 251. The case's initial enforcement commenced in January 2024, was later terminated, and resumed in September 2024, with a core enforcement amount reaching 677 million yuan.
As one of the shareholders of Langfang Bank, Oriental Baoye has long been mired in a severe debt crisis. Public information shows that the company has been listed as a subject of enforcement four times, with a cumulative total enforcement amount as high as 1.618 billion yuan, involving enforcement cases in courts in Beijing, Fujian, Hebei, and other regions. Among these, the Beijing First Intermediate People's Court once issued a bounty announcement for clues to executable assets. Another enforcement case involving 625 million yuan was filed for refusal to fulfill a court judgment, and the company and its legal representative have been subjected to restrictions on high-consumption activities.
Although the specific timing of Oriental Baoye's entry into Langfang Bank has not been explicitly disclosed, considering Langfang Bank's capital increase and share expansion process from 2013 to 2015, its entry likely occurred during this period. It has long held a 2.66% equity stake, making it one of the bank's important small and medium-sized shareholders.
The applicant for this auction, Shengjing Bank, has itself undergone a major transformation. In August 2025, Shengjing Bank announced a cash offer acquisition initiated by Shengjing Financial Holding, controlled by the Shenyang State-owned Assets Supervision and Administration Commission, and its concert parties. Upon completion, it delisted from the Hong Kong Stock Exchange, ending its listing history.
However, delisting did not terminate Shengjing Bank's debt recovery efforts. Apart from this auction of Oriental Baoye's Langfang Bank stake, in January 2026, Shengjing Bank's Tianjin Branch applied to auction shares of another company due to a financial loan contract dispute. Shengjing Bank is actively cleaning up its existing creditor rights through judicial disposal to recoup funds and improve its own asset quality.
**Chilly Reception for Bank Equity**
The auction of Langfang Bank's equity is not an isolated case. In recent years, multiple batches of the bank's equity have been pushed onto the judicial auction market, often meeting with failed auctions or lack of interest, reflecting market caution towards its equity value.
In January 2026, the Alibaba Asset judicial auction platform showed that 30.6 million shares of Langfang Bank equity held by Tianjin Runsheng Plastic Products Co., Ltd. were up for auction, with a starting price of 82.926 million yuan, equivalent to 2.71 yuan per share. Despite attracting nearly 600 views, no investors had registered by the auction date, continuing the previous trend of cold reception.
Looking back to 2025, two large-scale equity auctions for Langfang Bank also ended in failure. In July, an auction for 167 million shares held by the second-largest shareholder, Langsen Automobile Industrial Park, with an assessed value of 608 million yuan and a starting price of 486 million yuan (2.91 yuan per share), attracted over 2,000 views but received zero bids; after the failed auction, it was relisted at a reduced price of 413 million yuan (2.48 yuan per share) but still found no takers. In October, 43.3501 million shares (0.7513% of total share capital) held by Hebei Tianyu Industrial Group were put up for auction with a starting price of 120 million yuan (approximately 2.77 yuan per share), ultimately also failing due to no bids.
Extending the timeline back to 2022, Langfang Bank equity auctions were already showing signs of a cold reception. In November of that year, 200 million shares (3.466% of total share capital) held by Tiantong Hongji Group were auctioned with a starting price of 560 million yuan (2.8 yuan per share). Despite being a core equity stake that could make the buyer a top-ten shareholder, the auction ultimately failed due to no registrations. It is worth noting that the predecessor of this shareholder was a state-owned enterprise involved in real estate, finance, and other sectors; the failure of its equity disposal to attract investors already revealed insufficient market confidence in Langfang Bank's equity.
Analysis of auction price changes shows that the starting price per share for Langfang Bank equity has gradually decreased from 2.8 yuan in 2022 to 1.58 yuan in 2026, a drop of over 40%. Even so, it still struggles to attract investor favor.
Langfang Bank's failed equity auctions are not an exception; in recent years, a chilly reception for small and medium-sized bank equity auctions has become an industry norm.
In January 2025, 25 bank equity auctions led by Guangzhou Rural Commercial Bank all failed, including lots such as 1.106 billion shares of Zhongyuan Bank. In January 2026, 416 million shares of Shanxi Bank failed to sell, as part of asset disposal during the restructuring of shareholder Zhongrong Xinda; over 17 million shares of Hebei Bank remained unsold despite multiple rounds of discounted auctions, with few large-scale equity auctions succeeding since 2019. 31.748 million shares of Inner Mongolia Bank failed to sell despite four price reductions, and some banks even struggled to attract investors with "1 yuan starting price" auctions.
**"Thorough Transformation"**
Langfang Bank's equity restructuring began with the debt crisis of its original largest shareholder, China Fortune Land Development. In July 2013, China Fortune Land Development entered Langfang Bank through a capital increase and share expansion, acquiring a 15.38% stake to become the second-largest shareholder. After another capital increase in 2015, its stake rose to 19.99%, securing the position of largest shareholder. In 2019, China Fortune Land Development continued to subscribe to a private placement, maintaining this shareholding ratio, resulting in a deep binding between the two.
After China Fortune Land Development's debt crisis erupted in 2021, it began continuously reducing its stake in Langfang Bank. By the end of 2023, its shareholding ratio had dropped to 6.74%, relegating it to the fifth-largest shareholder, with all its held 389 million shares pledged. Subsequently, China Fortune Land Development compensated Langfang Bank debts through asset disposals, gradually exiting the major shareholder sequence.
Accompanying China Fortune Land Development's exit was the continuous increase in holdings by local state-owned capital. In February 2025, approved by the Hebei Financial Regulatory Bureau, Langfang City Investment Holding Group acquired a total of 725 million shares held by three enterprises, increasing its stake from 7.44% to 19.99% and becoming the largest shareholder. By the end of June 2025, the proportion of state-owned shares in Langfang Bank had increased to 35.88%; the bank also received approval to issue up to 2.909 billion shares, planning a capital increase of approximately 8 billion yuan. Upon completion, the state-owned share ratio is expected to further increase to 57.37%.
Simultaneous with the equity adjustment, Langfang Bank's management team also completed a transition. In January 2025, the Hebei Financial Regulatory Bureau approved Cui Jiantao as the bank's director and chairman. He previously held long-term positions at Bank of China, serving as Party Committee Secretary and President of Bank of China's Langfang Branch, possessing extensive regional banking management experience.
The long-vacant president position has also been filled. In 2025, Fu Tiejun, former deputy president of China Construction Bank's Cangzhou Branch, appeared publicly as Langfang Bank's Deputy Party Committee Secretary and President (acting). He is expected to be formally appointed president after the relevant appointment procedures are completed.
Changing the leadership team is easy, but escaping operational difficulties is hard. In 2024, Langfang Bank's operating performance faced significant pressure, with revenue and net profit declining for several consecutive years. Financial reports show that as of the end of 2024, the bank's total assets were 305.624 billion yuan. It achieved annual operating revenue of 3.717 billion yuan and a net profit of 248 million yuan (consolidated basis), year-on-year decreases of 20.62% and 57.86%, respectively. Revenue had declined for four consecutive years, and profit had seen significant declines for three consecutive years, with decreases of 43.04%, 28.05%, and 57.86%, respectively.
Issues regarding asset quality are even more prominent. At the end of 2024, the bank's non-performing loan ratio rose to 2.44% (parent bank basis), remaining above 2% for five consecutive years, far higher than the commercial banking industry average of 1.5%, and ranking highest among the nine city commercial banks in Hebei Province. The provision coverage ratio dropped by 48.9 percentage points to 104.29%, not only below the regulatory red line of 120%-150% but also significantly lower than the commercial banking industry average of 211.19%, indicating insufficient risk resilience.
Affected by declining market interest rates and intensified interbank competition, the bank's net interest margin fell to 1.25% in 2024, a low in nearly five years, further squeezing profit margins.
Facing these difficulties, Chairman Cui Jiantao stated in an interview in September 2025 that the bank must tackle challenges with the tenacity of "forging ahead despite difficulties," steadily advancing various tasks related to high-quality transformation and operational development. He mentioned that the state-owned capital increase is an important strategic measure to optimize the equity structure and stabilize the path of high-quality development. The bank is conducting comprehensive strategic cooperation with numerous government agencies and state-owned enterprises at the city and county levels, integrating into the broader context of Beijing-Tianjin-Hebei coordinated development, and focusing on areas such as commerce and logistics, supply chain finance, and rural revitalization to find new growth drivers.
However, challenges such as improving asset quality, optimizing the profit structure, and resolving shareholder risks still require time to solve. Whether the equity stake placed on the auction block by Shengjing Bank can be successfully sold may become an important window for observing market confidence in its transformation.