Previously, Gansu Bank had launched an employee stock holding plan, raising funds amounting to 392 million yuan. Currently, the stock price of this state-owned listed bank has plummeted by 90%, rendering many employees’ holdings as “dead money”. Faced with severe losses and an inability to exit the invested funds in the long term, many employees are feeling uneasy, with some expressing their discontent through the media.
According to recent articles by Sina Finance, “Employees of Gansu Bank complain that the bank allowed employees to invest in stocks through loans before going public, with each person investing one hundred thousand yuan, now facing losses exceeding 80%.” When China Economic Net called the Gansu Bank office for clarification, the response was that they were not aware of the specific situation.
In another report by Jiemian News, a source close to Gansu Bank stated that the employee stock holding plan was initially intended as a welfare benefit. However, due to factors such as the recent downturn in the banking industry and difficulties in trading the shares held by employees, this “benefit” has eventually turned into a significant “point of contention” for many shareholders.
Gansu Bank was established in September 2011 with an initial registered capital of 3.486 billion yuan after being approved by the former China Banking Regulatory Commission. It was set up jointly by Gansu Provincial Highway, Aviation, and Travel Investment Group Co., Ltd., Jiuquan Iron and Steel (Group) Co., Ltd., and other provincial state-owned large and medium-sized enterprises as well as other initiators through the merger and reorganization of Pingliang City Commercial Bank and Baiyin City Commercial Bank.
On January 18, 2018, Gansu Bank was listed on the main board of the Hong Kong Stock Exchange, becoming the first listed bank in Gansu Province. As of the end of June 2024, Gansu Bank’s total capital amounted to 15.07 billion yuan, including 11.276 billion shares of domestic shares and 3.794 billion H shares, with no controlling shareholder or actual controller.
In the first half of 2024, Gansu Bank achieved a total revenue of 3.157 billion yuan, a 9.5% year-on-year decrease; the net profit was 395 million yuan, a 3.3% year-on-year decrease, illustrating a challenging situation of both declining revenue and net profit.
In 2014, Gansu Bank launched an employee stock holding plan targeting internal employees. The bank issued 270 million shares of domestic shares to 2,692 employees at 1.45 yuan per share, raising a total of 392 million yuan, with an average investment of about 145,000 yuan per employee.
Gansu Bank was listed on the Hong Kong Stock Exchange on January 1, 2018, at an H share issuance price of 2.69 Hong Kong dollars. The stock price initially soared to 3.15 Hong Kong dollars, but has since continued to decline. As of the close on February 28, the H-share price of Gansu Bank was only 0.231 Hong Kong dollars, a 91% drop from the issuance price.
As the stock price continues to plummet, issues with the employee stock holding plan have surfaced. In mid-February 2025, a former employee of Gansu Bank revealed that before the bank went public, employees were required to loan money to buy shares, with each person investing about 100,000 yuan. It was claimed that due to some employees’ insufficient funds, the bank arranged for them to raise funds to purchase internal shares through consumer loans, sparking public attention.
According to regulatory requirements, employee stock holding funds should come from legal salaries, and financial institutions are not allowed to provide loans to assist employees in stock purchases. As per regulatory demands, if a financial institution provides loans for share purchases, the principal must be recovered and interest must be charged at the benchmark rate within one year of issuance.
Since employees hold shares that are not traded freely in the secondary market through the Stock Connect, they can only be transferred within the bank or among shareholders by agreement, making it almost impossible to liquidate their holdings due to insufficient demand. Many shareholders, including those who have left the company, have been unable to cash out their shares for years and have not received any cash dividends for five consecutive years since the initial dividend distribution in 2018, resulting in the employees’ holdings becoming “dead money”.
Some employees have expressed their discontent through the media, stating that “the 100,000 yuan investment has now dwindled to less than 20,000 yuan.” Several employees have requested the bank to devise an exit strategy, but have yet to receive a definitive response. Some shareholders have not even received formal share certificates, further exacerbating the employees’ distress and dissatisfaction.
Up to now, Gansu Bank has not issued any public announcements or detailed responses to this incident, and multiple attempts by the media to contact relevant departments of the bank have not been answered. This employee stock holding incident not only impacts internal morale but also raises concerns in the market about the bank’s corporate governance and stability.