After failing to go public on the A-share market in 2018 and 2019, Kunshan Rural Commercial Bank (KRCB) submitted its prospectus again in March 2023, but there has been no new progress to date.

As of now, the review status remains "accepted but not inquired."

The prospectus indicates that the sponsor of KRCB is CITIC Construction Investment, and the lead underwriters are CITIC Construction Investment and Soochow Securities.

Notably, at the end of 2018, KRCB purchased a fund product from CITIC Group's CITIC Prudential Fund, with a book value of 295 million yuan.

Between 2020 and 2021, it made significant purchases of three more fund products from CITIC Prudential, with a combined book value of 4.542 billion yuan, accounting for 46.13% of the bank's holdings in various public funds.

Tianyancha shows that CITIC Construction Investment and CITIC Prudential Fund are both part of the "CITIC family," being important member companies under the CITIC Group.

The two institutions are not only closely linked in their equity structure but also have connections in their management levels.

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On the eve of the IPO, the substantial purchase of multiple fund products from the sponsor's related company may raise questions about the impartiality of the sponsorship business.

Perhaps only KRCB knows the answer.

According to the prospectus submitted by KRCB in 2019, in November 2018, just one month before KRCB first submitted its prospectus, the bank purchased the "CITIC Prudential Stable Hong A" fund product from CITIC Prudential, with a book value of 295 million yuan.

However, the product's performance has been mediocre.

After selling the product, KRCB significantly increased its purchases of other fund products from CITIC Prudential.

The latest version of the prospectus shows that in March 2020, November 2020, and February 2021, KRCB successively purchased the "CITIC Prudential Jia Feng One-Year Fixed Open Bond Initiated," "CITIC Prudential Jia Run 66-Month Fixed Open Pure Debt," and "CITIC Prudential Hui Ze 18-Month Fixed Open Bond" products, with a combined book value of 4.542 billion yuan, accounting for 46.13% of the bank's holdings in various public funds.

However, in terms of performance, the above products do not seem to be a good investment choice.

As of August this year, the cumulative return of CITIC Prudential Jia Feng One-Year Fixed Open Bond Initiated since its establishment is 13.3%, far below the average of 16.83% for similar products; the cumulative return of CITIC Prudential Jia Run 66-Month Fixed Open Pure Debt is 15.21%, also underperforming the average.

Although only CITIC Prudential Hui Ze 18-Month Fixed Open Bond outperformed the market, looking back to the day before KRCB's purchase on February 2, 2021, the cumulative return of the product was 22.33%, lower than the average of 24.09% for similar products and significantly lower than the CSI 300's 65.79%.

Moreover, looking at the executive's resume, the current president of KRCB, Gao Qi Dong, also has numerous connections with the "CITIC family."

Public information shows that Gao Qi Dong's current position as president was approved in August 2020.

Prior to that, Gao Qi Dong had worked at CITIC Bank, successively holding positions such as Deputy Director of the Kunshan Branch Development Zone Sub-branch, Accounting Director of the Kunshan Branch, and Accounting Manager of the Changshu Branch.

On the eve of the listing, the bank not only chose CITIC Construction Investment as the IPO sponsor but also made four substantial purchases of fund products from CITIC Prudential, with mediocre performance.

Such frequent large transactions, coupled with the current president's background in the "CITIC family," have inevitably raised doubts among market participants.

Recently, KRCB has once again come into the public eye due to a penalty notice.

On August 7, the National Association of Financial Market Institutional Investors announced that it would initiate a self-regulatory investigation into four rural commercial banks in Jiangsu.

These four banks are KRCB, Jiangnan Rural Commercial Bank, Changshu Bank, and Sunan Bank.

The reason is that the association detected suspicions of market price manipulation and interest transfer in the secondary market transactions of government bonds by these institutions.

It is understood that these four rural commercial banks have recently made large purchases of government bonds, and to maintain the order of the bond market, the association has introduced a number of measures.

However, this high-profile handling is relatively rare.

According to official website information, KRCB was established in 2004 and was formerly known as Kunshan City Rural Credit Cooperatives Union.

As of the end of 2023, the bank has 78 branches, including 69 in Kunshan and 9 in other parts of Jiangsu Province.

At the same time, it has initiated the establishment of one rural bank with four branches.

According to the 2023 annual report, the bank achieved a revenue of 3.91 billion yuan, a decrease of 4.35% year-on-year, and a net profit of 1.759 billion yuan, an increase of 6.17% year-on-year.

As of the end of 2023, the bank's total assets were 176.143 billion yuan, an increase of 13.56% from the end of the previous year; the net amount of loans and advances was 101.194 billion yuan, an increase of 14.09% from the end of the previous year.

Despite good performance, the bank has frequent compliance and internal control issues.

In May 2023, KRCB was subjected to a measure by the Jiangsu Securities Regulatory Bureau to suspend accepting new investor applications for opening trading accounts for six months due to violations in four aspects: system construction and implementation, internal control, system construction, and assessment mechanisms.

In April 2022, KRCB was fined 450,000 yuan by the Suzhou Banking and Insurance Regulatory Bureau for "inadequate management of investment business."

In addition, two employees were each fined 60,000 yuan for directly responsible for the above incidents.

At the beginning of 2022, the Guangling branch of KRCB was fined 500,000 yuan by the Yangzhou Banking and Insurance Regulatory Bureau for irregularities in credit funds flowing into real estate and increasing corporate financing costs.

In addition, the Tongshan branch was fined 350,000 yuan by the Xuzhou Banking and Insurance Regulatory Bureau for misappropriation of credit funds.

Since 2016, KRCB has been preparing for the IPO, which has lasted eight years.

Although the bank has achieved steady growth in revenue and net profit in the past few years, it still faces some long-standing issues in related transactions, internal control, and compliance.

Public information shows that including KRCB, a total of seven banks are currently in line for A-share IPO.

It is worth noting that since Lanzhou Bank went public in January 2022, small and medium-sized banks have been "barren" in A-share IPO for more than two years.

Whether KRCB can successfully go public as desired will continue to be followed.