Postal Savings Bank Of China Co.,Ltd. (PSBC) recently announced it will absorb and merge its wholly-owned subsidiary Zhongyou Youhui Wanjia Bank Co., Ltd. (Youhui Wanjia Bank).

According to PSBC's announcement, upon completion of the absorption merger, Youhui Wanjia Bank's independent legal entity status will be legally canceled. All businesses, assets, creditor's rights, debts, and other rights and obligations of Youhui Wanjia Bank will be inherited by PSBC. The relevant rights and obligations of Youhui Wanjia Bank's customers will remain unaffected, and legally signed contracts and agreements will continue to be valid.

Since Youhui Wanjia Bank is a wholly-owned subsidiary of PSBC, its financial statements have been included in PSBC's consolidated statements at 100%. The absorption merger will not have a substantial impact on PSBC's financial condition and operating results, nor will it harm the interests of PSBC and all shareholders.

PSBC stated that absorbing and merging Youhui Wanjia Bank will enable the integration of its accumulated excellent online operational experience over the past few years into PSBC's overall development strategy, providing strong supplementation to PSBC's online business.

**Youhui Wanjia Integrated into Parent Bank**

Direct banks are internet-only banks without offline physical branches, representing a new business model for digital transformation in the banking industry. They help guide banking institutions in practicing inclusive finance and serving more long-tail financial customers.

On December 21, 2020, PSBC announced it received approval from the China Banking and Insurance Regulatory Commission to establish the direct banking subsidiary Youhui Wanjia Bank, with proposed registered capital of RMB 5 billion.

One year later, Youhui Wanjia Bank was established with registered capital of RMB 5 billion, wholly controlled by PSBC. Initially, Youhui Wanjia Bank positioned itself to "serve agriculture, rural areas and farmers, assist small and micro enterprises, and benefit the public," relying on "data + scenarios" to build an open and shared digital inclusive financial service model.

Since its inception, Youhui Wanjia Bank has explored online banking operations, focusing on the settlement sector. Around the payment and settlement needs of commercial customer groups, it developed the product "Hui Shangmao," becoming a "customer-sticky" product for postal branches to expand commercial customer groups, achieve data closed loops, and assist comprehensive development. In the credit sector, Youhui Wanjia Bank independently developed the personal business loan product "You Shangdai," innovatively adopting a structured profit-sharing method based on actual interest received to promote reasonable matching of returns and risks.

As of the end of June 2025, Youhui Wanjia Bank's asset scale reached RMB 12 billion with an average annual growth rate of 29%; deposits reached RMB 7.2 billion with an average annual growth rate of 120%; and the number of account-opening customers reached 16.45 million.

The announcement shows that all businesses, assets, creditor's rights, debts, and other rights and obligations of Youhui Wanjia Bank will be inherited by PSBC, and the relevant rights and obligations of Youhui Wanjia Bank's customers will remain unaffected.

PSBC stated: "In the long term, the existing loans, deposits, and funds of Youhui Wanjia Bank that PSBC will undertake have a relatively small business scale, and the fund and loan businesses will not be renewed after natural expiration, having a relatively small overall impact on PSBC's future performance."

**Direct Banks Moving Toward Integration**

PSBC's absorption and merger of Youhui Wanjia Bank is not an isolated case but a common phenomenon in the banking industry's digital transformation process in recent years. From an industry perspective, over the past twelve years, direct banks have experienced a cycle from prosperity to contraction.

On September 18, 2013, Bank of Beijing launched China's first direct banking service. In 2014, China Minsheng Bank, Industrial Bank, and others followed suit, and direct banks entered an explosive growth period.

In 2017, Aibank, China's first independent legal entity direct bank (jointly established by China CITIC Bank and Baidu), was launched. In December 2020, China Merchants Bank Topology Bank and Youhui Wanjia Bank were successively approved. Eventually, Youhui Wanjia Bank was officially established in January 2022, becoming the first direct bank approved among state-owned large banks, while China Merchants Bank Topology Bank had its establishment application withdrawn by China Merchants Bank's board resolution on July 22, 2022, terminating preparation work.

During the prosperous period, there were once over one hundred direct banks nationwide, but they have gradually decreased. Large banks have successively integrated direct banking functions into mobile banking. As multiple banks have continuously integrated their direct banks or digital financial subsidiaries, the industry is transitioning from initial "multi-point experimentation" to current "comprehensive integration."

Market analysts believe that as a direct bank, Youhui Wanjia Bank's establishment was one of the innovative models for the banking industry to explore coordinated online and offline development. Direct banks initially attracted attention for their online and low-cost characteristics, but their independent existence value has now been significantly diluted.

Analysts explain that compared to increasingly powerful mobile banking, direct banks face challenges in product homogenization and high customer acquisition costs, making it difficult to meet market demands for one-stop, full-scenario financial services. In fact, over 20 banks have successively closed or integrated their direct banking businesses in recent years, reflecting the banking industry's trend toward "integrated operations."

**Expected Synergistic Effects**

Based on the above analysis, industry insiders believe that the exit of some direct banks is not a halt in digital exploration but precisely reflects the banking industry's development logic transitioning from "extensive channel expansion" to "refined ecosystem cultivation."

In terms of digital transformation, PSBC has successively completed the launch of new-generation personal business core systems, corporate business core systems, and credit card business core systems in recent years. Meanwhile, the bank has applied new technologies such as big data and artificial intelligence to integrate multi-dimensional internal and external data, using technology to empower business model innovation and process optimization, achieving certain results in proactive credit granting and scenario-based inclusive finance.

PSBC also stated in its announcement that absorbing and merging Youhui Wanjia Bank will help further optimize PSBC's management and business structure, consolidate digital transformation results, improve operational efficiency, and reduce management costs.

Regarding the purpose of absorbing and merging Youhui Wanjia Bank, PSBC stated three objectives:

First, achieving strategic integration. After the absorption and merger, Youhui Wanjia Bank's online operational experience will be integrated into PSBC, supplementing PSBC's online business.

Second, optimizing resource allocation. After the absorption and merger, Youhui Wanjia Bank's business resources and talent teams will inject new momentum into PSBC's development.

Third, reducing management costs. After the absorption and merger, PSBC's management costs will be reduced, which "will help direct resources to more complementary areas and improve overall operational efficiency."

Experts analyze that this integration is expected to bring significant synergistic effects. Particularly after PSBC's absorption and merger of Youhui Wanjia Bank, it will effectively reduce PSBC's management costs and help PSBC direct resources to more complementary areas, improving PSBC's overall operational efficiency.