As the "capillaries" of China's financial system, small and medium-sized banks serve as the main force in supporting local economies, implementing inclusive finance and rural revitalization strategies, while also playing a key role in maintaining regional financial stability and ensuring high-quality economic development. During the "14th Five-Year Plan" period, China's financial industry has worked to resolve risk challenges facing small financial institutions through deepening reforms, driving the sector to achieve a leap from "risk prevention and control" to "quality improvement and efficiency enhancement." Ningxia's practices serve as a vivid microcosm of this nationwide reform.
"During the '14th Five-Year Plan' period, we have always regarded preventing and resolving financial risks as the primary responsibility of regulatory authorities, treating the prudent disposal of risks at small financial institutions as the top priority," stated Li Yunze, Director of the National Financial Regulatory Administration (NFRA), at a State Council Information Office press conference on September 22, clarifying the core orientation of small bank reform and risk resolution over these five years.
Looking back to the beginning of the "14th Five-Year Plan," small financial institutions faced pressure on asset quality, with some institutions encountering liquidity difficulties. Faced with this challenge, regulatory authorities focused on regional differences and implemented targeted policies, promoting key regions to formulate personalized reform plans through "one province, one policy" approaches. They also innovatively utilized multiple instruments including mergers and acquisitions, online restoration, and market exit to ensure risk resolution work proceeded forcefully and orderly. After five years of continuous effort, reform and risk resolution work has achieved significant results. According to NFRA data, non-performing asset disposal during the "14th Five-Year Plan" period increased by more than 40% compared to the "13th Five-Year Plan" period, with the industry's total capital and provisions for risk resistance exceeding 50 trillion yuan. Currently, the number of high-risk small and medium bank institutions has declined significantly from its peak, with some provinces achieving "dynamic zero" high-risk small institutions.
Recent field research in Yinchuan and Shizuishan cities in Ningxia revealed that the Ningxia Financial Regulatory Bureau, under NFRA guidance, has made preventing and controlling regional financial risks its primary responsibility. Guided by principles of "stabilizing the overall situation, coordinating comprehensively, implementing classified policies, and precision defusing," it has promoted effective reform and risk resolution at Shizuishan Bank and Helan Huishang Village Bank.
This "crossing the river by feeling the stones" reform and risk resolution of small financial institutions has not only strengthened Ningxia's financial security defense line but also enabled financial "living water" to precisely irrigate Ningxia's "Six New, Six Special, Six Superior + N" industries, injecting strong momentum for local high-quality economic development. The "central-local coordination, classified disposal, treating both symptoms and root causes" path formed through exploration provides beneficial reference and valuable experience for western provinces and even nationwide small bank deepening reforms and risk resolution.
**Shizuishan Bank's Reform: Precision "Defusing" with Focus on "Root Treatment"**
As an important local city commercial bank in Ningxia, Shizuishan Bank once faced challenges including rising credit risks and significant capital supplementation pressure due to macroeconomic fluctuations and regional industrial adjustments. However, over the past year, relying on a reform path of "upgraded supervision + central-local coordination + shareholder empowerment," the bank's reform and risk resolution has steadily advanced.
Before reform and risk resolution, Shizuishan Bank faced two core operational difficulties: significant capital supplementation pressure and substantial non-performing asset disposal pressure. Targeting these two aspects, precision "defusing" was conducted through joint efforts of NFRA, the Ningxia Hui Autonomous Region Party Committee and government, and the Ningxia Financial Regulatory Bureau.
Regarding capital supplementation, Shizuishan Bank adhered to a combined internal and external capital supplementation approach to drive reform. On one hand, it formulated a 2025-2029 endogenous capital supplementation plan, continuously strengthening communication with major and minor shareholders, focusing on increasing retained profits to supplement capital through structural adjustments and increased intermediate income. On the other hand, through various efforts, it promoted capital injection from the Ningxia Hui Autonomous Region's finance department, significantly improving the capital adequacy ratio.
For non-performing asset disposal, Shizuishan Bank focused on implementing "project-based" management for large-scale risk clients, creating synergy in non-performing asset disposal through "daily monitoring, weekly coordination, bi-weekly reminders, monthly interviews" working mechanisms. It innovatively completed Ningxia's first structured non-performing asset transfer transaction and collaborated with local courts to pilot Ningxia's first batch of pre-litigation preservation models for consumer loans.
Simultaneously, Shizuishan Bank strictly controlled new credit risk additions, clearly defining key credit risk indicators and main control targets, setting risk limits by levels with strict implementation, continuously improving "centralized approval + digital approval + small-amount differentiated authorization" approval mechanisms, strengthening credit risk identification and early warning management mechanisms, and enhancing refined liquidity risk management.
Under these precision-oriented, multi-dimensional reform and risk resolution measures, Shizuishan Bank achieved significant risk resolution results, with credit risks effectively mitigated and continuously converging, laying a solid foundation for subsequent steady operation and high-quality development.
Notably, Shizuishan Bank's risk resolution reform focused not only on short-term "defusing" but also emphasized long-term "root treatment."
"Only when a bank's own corporate governance is perfected can the bank move toward sustainable, high-quality development," emphasized a Ningxia regulatory official.
According to research findings, to address problems "at the root," the Ningxia Hui Autonomous Region explored establishing a dual management working mechanism between the autonomous region's Party Committee Financial Work Committee and Shizuishan City Committee's "Two New" Work Committee for the bank: elevating Shizuishan Bank to the level of autonomous region directly-managed financial institutions for supervision, assessment, and management; having Shizuishan City Committee dispatch cadres to serve as full-time deputy Party secretary and discipline inspection secretary; clarifying the bank's Party committee's preliminary review authority over major decisions regarding organizational structure, reform and risk resolution, and serving the real economy, achieving "bidirectional entry and cross appointment" to ensure the Party committee's role in "setting direction, managing the overall situation, and ensuring implementation" is realized.
In corporate governance optimization, Shizuishan Bank reduced the proportion of executive directors and increased independent director seats, selected professionals in accounting, finance, and risk disposal to serve as directors and supervisors, established special committee review opinion reporting mechanisms and board opinion supervision mechanisms to ensure scientific and efficient decision-making. In internal control and compliance construction, it built a "horizontal to edge, vertical to bottom" compliance management framework, clarifying the quantity and capability requirements for compliance personnel at branches, promoting compliance management transformation from "passive response" to "proactive prevention and control."
"After deepening reform, Shizuishan Bank has shown significant improvements in operational indicators, institutional mechanisms, and risk control management," said Zhang Chengbao, Party Secretary and Chairman of Shizuishan Bank.
**Helan Huishang Village Bank Risk Clearance: Creating a Village Bank "Integration Benchmark"**
Different from general "village-to-branch" conversions (where village banks are absorbed and merged by main sponsors while being dissolved and simultaneously rebuilt as parent bank branches), Ningxia Bank's "village-to-branch" conversion involved acquiring the former Baoshang Bank-sponsored Helan Huishang Village Bank and converting it into a subsidiary branch. Therefore, its reform and risk resolution was more complex and special compared to general village bank mergers, making the work more challenging.
According to on-site multi-party understanding, the risk resolution difficulties of Helan Huishang Village Bank mainly involved two aspects: first, before reform and restructuring, Helan Huishang Village Bank was the largest village bank by asset scale in Ningxia jurisdiction and was significantly affected by the original Baoshang Bank's distress, making disposal more difficult; second, the number of small legal person banks capable of undertaking the business within Ningxia jurisdiction was extremely limited, and taking over Helan Huishang Village Bank's business, outlets, and employees posed enormous challenges for the receiving institution itself.
To resolve these difficulties, NFRA guided cross-provincial coordination between governments and regulatory departments in Ningxia and Inner Mongolia, ultimately promoting Ningxia Bank's 100% shareholding of Helan Huishang Village Bank and its reconstruction as a branch, exploring the formation of a "four-level coordination + collaborative disposal + equity transfer + merger and reorganization" reform and risk resolution model, achieving risk clearance and leapfrog improvement in service capabilities, creating a new "integration benchmark" for village banks.
According to multi-party understanding, Helan Huishang Village Bank's reform and risk resolution work was incorporated into key work coordination by Ningxia's local Party committee and government. Under NFRA guidance, the Ningxia Financial Regulatory Bureau collaborated with territorial Party committees and governments, unified risk resolution objectives, implemented disposal requirements, established reform and risk resolution working mechanisms, assessed and formulated work plans and multiple emergency contingency plans, clearly defining the core path of Ningxia Bank acquiring equity and rebuilding branches.
During reform implementation, following market-oriented and rule-of-law principles, regulatory departments promoted the signing of tripartite agreements among Mengshang Bank (formerly Baoshang Bank), Ningxia Bank, and Helan Huishang Village Bank, reasonably determining equity consideration and guiding completion of corporate governance procedures including board of directors and shareholder meetings.
According to Ni Guoliang, Deputy Party Secretary of Ningxia Bank, Helan Huishang Village Bank launched reform in early July 2024, going through key stages including due diligence, asset inventory and verification, equity acquisition, absorption and merger, cancellation of the original village bank's legal person status, and conversion to a branch. Finally, in July 2025, all 16 original shareholders of Helan Huishang Village Bank smoothly exited, 8 outlets uniformly changed signage, and 220 employees were properly placed, achieving stable implementation of reform and risk resolution objectives.
Ni Guoliang stated that after integration into Ningxia Bank, the original Helan Huishang Village Bank outlets transformed into Ningxia Bank's Helan Branch, retaining the advantages of "rooted locally, close to farmers" personal and geographical connections while leveraging provincial city commercial bank resources to address technical and funding shortcomings. In business integration, the original 21 credit products were optimized to 15, with new featured products including "Agricultural Quick Loan," "Easy Car Loan," and "Taxi Loan" added, achieving unified credit authorization for cross-customers and standardized transfer of off-site business, constructing an integrated operation model of "community + business district + agriculture + park," significantly improving customer service experience.
Wen Zuorui, President of Ningxia Bank's Helan Branch, told reporters that the new Ningxia Bank Helan Branch after absorbing and merging Helan Huishang Village Bank has three major changes: first, asset scale achieved new breakthroughs, with deposit scale exceeding 5 billion yuan, creating a historical high; second, business structure integration and upgrading transformed the institution from relatively single business operations to comprehensive operations, retaining the original village bank's featured businesses such as farmer loans and used car loans while innovating development; third, strengthening technology empowerment, where after "village-to-branch" conversion, leveraging Ningxia Bank parent bank resource sharing advantages, accelerating digital transformation, and achieving significant improvement in financial service capabilities.
The reform and risk resolution practices of Shizuishan Bank and Helan Huishang Village Bank are vivid examples of Ningxia's deepening financial reform and maintaining risk bottom lines. Through "classified policies and precision defusing," Ningxia has not only resolved historical legacy risks of small banks but also reshaped the financial ecosystem through reform, returning small banks to their roots of serving the real economy. In the future, as reform achievements continue to consolidate, Ningxia's small banks will further focus on "specialized and differentiated" development, continuing to make efforts in fintech, green finance, inclusive finance and other areas, providing more solid financial support for the construction of the Yellow River Basin ecological protection and high-quality development pilot area.