Just days before the release of its interim results, a notable proposal has emerged from the board of BANKOFJIUJIANG. On August 23, the bank published a notice for its third extraordinary general meeting of 2026, proposing to revoke all delegated authority previously granted to the chairman, president, other senior management, or other individuals designated by the board regarding the company's 3.6 billion yuan private placement. This revocation would cover both decision-making and administrative matters.
Under the standard procedure, after shareholders grant the board authority to handle the placement, the board typically delegates specific tasks—such as determining the issuance size, pricing, pricing mechanism, subscribers, timing, use of proceeds, and lock-up periods—down to the chairman, president, and senior management. By cancelling this delegation, BANKOFJIUJIANG is effectively reclaiming the decision-making and execution powers of its core leadership over this issuance. Moving forward, any matter, from selecting subscribers to signing subscription agreements or revising documents, must be submitted for collective board approval.
Intriguingly, this marks the second time in a short span that the bank has narrowed the scope of delegated authority. On August 6, the bank issued a notice for its second extraordinary general meeting of 2026, which included a proposal to adjust the delegation of authority to relevant individuals. At that time, the bank had only reclaimed the authority over decision-making matters related to the placement, leaving administrative tasks with the executive layer. That proposal was reviewed on August 21. Merely two days later, BANKOFJIUJIANG intensified its actions, fully reclaiming all delegated authority from core management over the placement. Such a move is uncommon among peers, and similar adjustments were not seen in the bank's previous capital-raising efforts. This break from convention has naturally sparked significant market curiosity.
The bank explained in its announcement that this adjustment aims to further optimise the decision-making process for the domestic share issuance and ensure its smooth execution. While the "power reclamation" may extend the working timeline to some extent, it also reduces the likelihood of improper actions by management in areas such as pricing and subscriber selection, thereby mitigating the risk of insider control.
Notably, in May, the China Securities Regulatory Commission issued ten feedback points concerning this private placement. Among them, the regulator explicitly requested BANKOFJIUJIANG to provide supplementary explanations on the delegation of authority: the specific circumstances and arrangements of the decision-making process, whether the current delegation arrangements comply with laws, regulations, and the company's articles of association, and whether such delegation is necessary. If so, the bank was asked to detail the specific delegation arrangements, including the scope of decision-making authority for each delegate, whether all actions fall within the resolutions of the shareholders' meeting, and whether all shareholders have been fully informed and have given their consent. The lead sponsor and applicant's legal counsel were also required to verify and issue clear opinions on these matters.
The private placement size has been significantly reduced. BANKOFJIUJIANG, established in 2000 from the consolidation of eight urban credit cooperatives in Jiujiang, currently counts the Jiujiang Finance Bureau and Beijing Automotive Group as its largest shareholders, each holding 12.85% directly. Industrial Bank follows closely with a 10.34% stake.
Looking back, the journey to advance this placement has not been entirely smooth. The proposal first emerged in October 2025, when the bank planned to issue no more than 860 million domestic shares and up to 175 million H-shares to no more than 35 qualified domestic institutional investors, including major shareholder subscribers. The shareholders' meeting had delegated authority over the issuance to the board and its designated delegates. Subsequently, the National Financial Regulatory Administration approved the plan, and some shareholders issued subscription intention letters. The Jiujiang Finance Bureau indicated an intention to subscribe to domestic shares worth no more than 500 million yuan, with its total subscription amount not exceeding its then-current shareholding ratio of the total raised funds.
However, before formal agreements were signed with subscribing shareholders, BANKOFJIUJIANG received feedback from the CSRC. While regulatory inquiries are routine, the content of the feedback reflected a cautious regulatory stance. Beyond the delegation issue, some points directly targeted the bank's shareholding structure and significant litigation. For instance, the planned issuance of 860 million domestic shares represented approximately 36.36% of the bank's issued domestic shares prior to completion, constituting a large-scale placement that could impact the ownership structure. The CSRC requested supplementary explanations on whether subscribers have connected or concerted-action relationships or whether the placement constitutes an acquisition. It also demanded disclosure of share freezes and pledges during the reporting period.
Meanwhile, a lawsuit involving a 2.446 billion yuan loan to the Sunac group also drew the CSRC's attention. The regulator required updates on the case's progress, whether it qualifies as a significant lawsuit, its potential adverse impact on the issuance, and its effects on the bank's operations, financial condition, and regulatory indicators. The sponsor, legal counsel, and accountants were asked to verify and provide clear opinions.
Shortly after the CSRC feedback, BANKOFJIUJIANG signed domestic share subscription agreements with the Jiujiang Finance Bureau and no fewer than six other subscribers. Compared with the initial plan, the final fundraising scale was considerably reduced. The agreements show the issuance of domestic shares was cut from the initial maximum of 860 million shares to 494.2 million shares, at a subscription price of 7.29 yuan per share, raising approximately 3.603 billion yuan in total. Of this, the Jiujiang Finance Bureau subscribed to 68.58 million domestic shares, contributing around 500 million yuan, while the remaining 426 million domestic shares were taken up by other subscribers.
Core capital pressure persists. BANKOFJIUJIANG had completed a capital increase at the maximum allowable scale in 2023, issuing up to 365 million domestic shares and 75 million H-shares at a price of 8.93 yuan per share, raising nearly 4 billion yuan. Following that round, the bank's total share capital expanded from 2.407 billion shares to 2.847 billion shares. That marked the bank's first capital raise since its 2018 Hong Kong listing, with proceeds primarily used to replenish core tier-1 capital.
However, just over two years after that round, BANKOFJIUJIANG has initiated another substantial private placement. Both rounds share the stated purpose of "effectively supplementing core tier-1 capital, enhancing risk resilience, and optimising the shareholding structure." Over a longer horizon, the bank's capital position has been less than ideal. At the end of 2022, its core tier-1 capital adequacy ratio fell to a low of 7.93%, approaching the 7.5% regulatory minimum. After the capital increase, this metric recovered to 8.64% in 2023 and 9.44% in 2024, alleviating much of the capital strain. Yet, for a bank, business expansion and asset growth inevitably consume core capital, and by the end of 2025, the ratio had slipped back to 8.87%.
Asset quality also remains a concern. Although the non-performing loan ratio edged down to 1.93% at the end of last year, it has deteriorated notably from 1.41% in 2021. The provision coverage ratio stands at only 152.21%, placing the bank's overall asset quality at a relatively low level among its peers.