In 2026, mainland China has already witnessed 401 banks being merged or dissolved, mostly concentrated in county-level small banks. Among them, the banks dissolved or merged in Gansu Province, Jilin Province, and Guizhou Province are the most numerous. Industry insiders indicate that as China’s economy declines, bank risks continue to be exposed and magnified, and this move is intended to mitigate those risks.
According to a report by “Huaxia Times” on September 10, the mainland’s enterprise risk monitoring and early warning platform, Enterprise Early Warning Channel, released statistics on September 10 showing that since 2026, there have been 401 rural commercial banks, rural cooperative banks, and village banks announced for merger or dissolution.
Out of these 401 banks, 251 are village banks, accounting for 62.6%; 109 are rural commercial banks, and 41 are rural credit cooperatives. The exiting banks are mostly concentrated in county-level small banks; among them, 278 have been approved for dissolution, 97 for merger, and 26 have had their business licenses canceled.
In various provinces of China, Gansu has 66 banks, Jilin 57, Guizhou 40, Sichuan 34, Shandong 24, Ningxia 19, with Gansu, Jilin, and Guizhou ranking in the top three.
After being merged or dissolved, most of these banks have been absorbed by others, turning their original branches into branches of the acquiring banks with the assets and liabilities being inherited by them.
Regarding the dissolution and merger of the 401 banks, the report suggests that on one hand, the pressure of China’s downward economic trend has increased, intensifying the competition among banks and further exposing bank risks, leading to a significant increase in efforts to mitigate these risks. Additionally, the pressure on bank profitability is also a crucial factor. The banking industry is utilizing mergers and dissolutions to expedite the removal of unprofitable village banks. Furthermore, with the net interest margin of commercial banks dropping to a historical low of 1.40%, the plight of small and medium-sized banks is exacerbated by the narrowing interest margin, making mergers and reorganizations a practical choice to address existing risks.
The report quotes Chief Expert Zeng Gang from the Shanghai Laboratory for Financial Development and Innovation, stating that this move primarily aims to reduce quantity while improving quality to mitigate existing risks and safeguard against the occurrence of systemic financial risks.