Restart Capital Increase and Share Expansion! Guangzhou Bank Withdraws IPO, Credit Card Distribution Center Closure Signals Strategic Transformation

In mid-February this year, Guangzhou Bank announced three procurement projects, revealing plans to increase capital through share expansion to further strengthen its capital base.

This capital increase occurred after Guangzhou Bank withdrew its A-share IPO application. The bank has been pursuing a listing for 16 years, from its initial proposal in 2009 until the final withdrawal of its IPO application in January 2025. The move underscores the urgent need to address its capital shortfall.

Guangzhou Bank Co., Ltd. (hereinafter referred to as “Guangzhou Bank”) was originally established as Guangzhou City Cooperative Bank in 1996. It has now developed into the largest legal entity city commercial bank in Guangdong Province.

As of the end of the third quarter of 2025, the bank’s total assets reached 912.076 billion yuan, making it a “quasi-trillion” city commercial bank. During the same period, the bank achieved operating income of 9.722 billion yuan, a decrease of 9.67% year-over-year, but its net profit data has not been disclosed.

Notably, Guangzhou Bank announced the closure of seven credit card branches at the end of January. In recent years, its credit card business, which accounts for half of its retail sector, has declined. By the end of 2024, credit card loan balances decreased by 18.11% year-over-year, with a credit card loan non-performing rate of 3.58%, indicating significant overdue risks.

Additionally, unofficial statistics show that Guangzhou Bank received four penalties in 2026, totaling 2.8 million yuan.

Facing challenges in performance growth and internal control compliance, how will the newly appointed Chairman Li Dalong, in his first year, turn the situation around? Will this capital increase and share expansion proceed smoothly?

1

Proposed Capital Increase and Share Expansion,

Supplementing Capital After IPO Withdrawal

Recently, Guangzhou Bank announced plans for a capital increase and share expansion, and initiated procurement for related intermediary services through competitive negotiation.

Specifically, three types of intermediary agencies are involved: accounting firms, securities companies, legal services (law firms and legal advisors), and asset appraisal services.

As of press time, Guangzhou Bank’s official website has removed the three tender notices. Tianyancha disclosed that the bank’s financial advisory service procurement project for the capital increase has completed evaluation, with two candidates announced as winners.

The first candidate is CITIC Securities and Wanshun Securities, with a bid of 550,000 yuan; the second is Guotai Haitong Securities, with a bid of 280,000 yuan. The tender announcement was publicized until March 6, and after the publicity period, the first candidate will become the final supplier.

Image / Announcement of Guangzhou Bank’s proposed capital increase project procurement (Source: Tianyancha, Guangzhou Bank official website)

It is noteworthy that this capital increase and share expansion occurred after the withdrawal of the A-share IPO application.

Guangzhou Bank first proposed a listing plan in 2009. It applied for an IPO in June 2020 and was accepted by the China Securities Regulatory Commission. However, in 2024, the listing process was suspended due to expired financial data and a change of accounting firms.

In January 2025, the bank officially withdrew its IPO application. The Shenzhen Stock Exchange decided to terminate the review, ending its 16-year pursuit of a listing.

According to the bank’s previous prospectus, since its establishment, Guangzhou Bank has completed seven rounds of capital increases and share expansions (including rights issues), aside from dividend distributions. Between 2005 and 2008, its total share capital increased from 2 billion to 8.3 billion shares. After renaming, it completed another large-scale capital increase in 2018.

Under the strategic decision to delay IPO, the bank has turned to capital augmentation and share expansion as the optimal solution.

As of the end of Q3 2025, Guangzhou Bank’s core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and total capital adequacy ratio were 7.73%, 9.2%, and 12.65%, respectively, down 1.37, 0.8, and 0.96 percentage points from the end of the previous year, reflecting an urgent need for capital replenishment.

More importantly, while expanding capital, Guangzhou Bank also needs to further optimize its equity structure and promote long-term, stable development.

In terms of ownership structure, Guangzhou Bank exhibits clear characteristics of local state-owned capital control. The 2024 annual report shows that Guangzhou Financial Holdings, as the controlling shareholder, directly and indirectly holds 42.3% of the shares.

Image / Top ten shareholders and shareholding structure of Guangzhou Bank (Source: Guangzhou Bank 2024 Annual Report)

However, in the second half of 2025, there was an incident where state-owned shareholders sold off their holdings.

“Bullet Finance” detailed in an article titled “Guangzhou Bank Faces Multiple Shareholder Liquidations, Net Profit Down 60% Last Year, 16 Years of Listing Terminated” how the Bank of Communications and CNOOC planned to sell their holdings in Guangzhou Bank. Previously, several of its shareholdings had been repeatedly auctioned but failed to sell.

Regarding the latest developments in the capital increase and share expansion, whether there is a timetable for completion, and which intermediaries are favored, “Bullet Finance” attempted further communication with Guangzhou Bank but has not received a response as of press time.

2

Performance Decline Needs Addressing,

Pushing for a “Second Entrepreneurship”

With total assets approaching one trillion yuan, Guangzhou Bank, as a local legal city commercial bank in Guangdong Province, maintains strong overall competitiveness.

As of the end of Q3 2025, total assets reached 912.076 billion yuan, up 6.7% from 854.805 billion yuan at the end of 2024, making it a “quasi-trillion” city commercial bank.

Reviewing the period from 2020 to 2024, the bank’s total assets grew at compound rates of 14.33%, 12.23%, 10.25%, 4.76%, and 2.77%, respectively. Despite slowing growth, the scale continued to expand, maintaining its position as the largest legal city commercial bank in Guangdong.

However, despite this scale expansion, the bank’s performance shows signs of decline.

By the end of Q3 2025, Guangzhou Bank achieved operating income of 9.722 billion yuan, down 9.67% from 10.763 billion yuan in the same period of 2024. In the first half of 2025, its revenue was 6.702 billion yuan, a year-over-year decrease of 10.16%, with net profit data not disclosed.

“Bullet Finance” found that Guangdong Province has five local city commercial banks. Besides Guangzhou Bank, only Dongguan Bank disclosed its revenue and net profit attributable to shareholders as 6.918 billion yuan and 2.546 billion yuan, respectively, by the end of Q3 2025. This indicates Guangzhou Bank’s revenue surpasses Dongguan Bank.

Since some Guangdong city commercial banks have not disclosed 2025 operational data, comparing 2024 performance shows Guangzhou Bank remains the leader in revenue at 13.785 billion yuan.

However, at the end of 2024, its net profit attributable to shareholders was 1.012 billion yuan, ranking third among local banks, behind Dongguan Bank (3.738 billion yuan) and Guangdong Huaxing Bank (2.852 billion yuan). Profitability still needs improvement.

Before 2024, Guangzhou Bank’s revenue had declined for two consecutive years, and net profit had fallen for four years. How the new Chairman Li Dalong, who took office at the end of 2024, will accelerate reform has become a key concern.

In early 2026, Guangzhou Bank launched a comprehensive “Second Entrepreneurship” reform, emphasizing a development path of “six characteristics”: specialization, localization, differentiation, lightweight, digital intelligence, and standardization. It targets seven customer groups, including industrial parks, small and medium foreign trade enterprises, and “little giants” in specialized and innovative fields.

Regarding asset quality, Guangzhou Bank has not disclosed relevant indicators since 2025.

“Bullet Finance” previously reported that as of the end of 2024, the bank’s non-performing loan ratio was 1.84%, down 0.21 percentage points year-over-year; non-performing loan balance was 8.525 billion yuan, a decrease of 10.36%. Its loan loss reserve coverage ratio at the end of 2024 was 158.76%.

According to the statistics from the Financial Regulatory Administration, the average non-performing loan ratio for city commercial banks in China in 2024 was 1.76%, with an average reserve coverage ratio of 188.08%. Guangzhou Bank’s indicators are below the city commercial bank average, indicating room for improvement.

Regarding whether performance has improved after Chairman Li Dalong’s first year, and what strategic reforms the “Second Entrepreneurship” entails, “Bullet Finance” attempted further communication but has not received a response.

Currently, Guangzhou Bank is at a critical stage shifting from scale expansion to high-quality development. How it will reverse the downward trend remains to be seen.

3

Closed All Credit Card Branches,

Penalties Reveal Compliance Gaps

In recent years, retail banking transformation has become a key area for domestic banks to reshape profit growth. However, in early 2026, Guangzhou Bank closed all its off-site credit card branches, sparking speculation about potential adjustments to its retail business structure.

On January 29, 2026, Guangzhou Bank’s official website announced that, following approval from the Financial Regulatory Administration, seven credit card branches in Jiangmen, Shenzhen, and Zhongshan would cease operations.

The 2024 annual report shows that the bank had seven credit card branches at the end of that year, meaning all were closed.

Image / Announcement of Guangzhou Bank’s credit card branch closures (Source: Guangzhou Bank official website)

In fact, the bank’s credit card loan scale has been declining, making the closure of these branches a major strategic adjustment.

Financial reports show that from 2020 to 2024, credit card loan balances were 712.99 billion yuan, 889.38 billion yuan, 1,015.08 billion yuan, 860.17 billion yuan, and 704.42 billion yuan, with year-over-year growth rates of 17.93%, 24.74%, 14.13%, -15.26%, and -18.11%, respectively.

This indicates that 2022 was a turning point, after which the bank’s credit card loans fell below 1 trillion yuan.

Additionally, the proportion of credit card loans in total retail loans over these five years was 46.28%, 50.1%, 55.08%, 46.59%, and 44.83%, showing that credit card business has historically been a dominant part of its retail sector. Adjustments to this business could significantly impact its retail financial foundation.

The China Securities Puzhen Rating Agency’s 2025 rating report on Guangzhou Bank states that as of the end of 2024, its credit card non-performing rate was 3.58%. Previously, the bank’s IPO prospectus disclosed a 4.88% non-performing rate at the end of 2023.

Therefore, overdue credit card loans are a key factor in the bank’s business adjustments.

More critically, data from YinDengWang in late May 2025 shows that Guangzhou Bank issued four notices for personal non-performing loan transfers, all related to personal credit card bad loans.

Image / Guangzhou Bank’s four personal non-performing loan transfer notices in Q2 2025 (Source: YinDengWang)