Deputy Mayor in charge of Yumin Bank, hiding the big logic of Nanchang's financial reform

Ask AI · What is Xu Hefei’s background in financial regulation, and how does it influence the transformation of Yumin Bank?

The vice mayor overseeing Yumin Bank also signals an important shift toward optimizing private bank regulatory policies and localized management reforms.

Produced by | China Visit Network

Reviewed by | Li Xiaoyan

Recently, the Nanchang Municipal People’s Government issued the 2025 municipal government leadership division document, clearly assigning Vice Mayor Xu Hefei to oversee Jiangxi Yumin Bank, sparking widespread discussion in the market about this Jiangxi’s first private bank’s governance model, regulatory orientation, and development positioning. As the first privately owned bank in China with state-owned capital involved, Yumin Bank’s inclusion into the local government’s management system is not merely an administrative adjustment, but a landmark practice under the backdrop of resolving local financial risks, optimizing governance structures, and reforming regulatory policies. It demonstrates Nanchang’s determination to deepen local financial reforms and also reflects policy signals that private banks are entering a new development stage.

This division arrangement mainly stems from Xu Hefei’s strong professional background in financial regulation and its high compatibility with Yumin Bank’s reform and transformation. His public resume shows he was born in 1980, with extensive experience in provincial financial regulatory departments. He has served as Director of Development Planning and Spokesperson at Jiangxi Provincial Financial Office, Director and Deputy Director of the Jiangxi Local Financial Supervision and Administration Bureau’s Office, and since November 2024, as Vice Mayor of Nanchang. From formulating provincial financial policies and industry regulation to managing local financial coordination, his career spans the entire financial regulatory chain, familiar with national regulatory policies and deeply understanding the operational logic and risk prevention points of local financial institutions.

In the division system, Xu Hefei is responsible for finance, state-owned assets management, investment and financing platforms, and oversees key state-owned platforms such as the Municipal Financial Bureau, State-owned Assets Supervision and Administration Commission, and Nanchang Investment Group. He also directly manages two key local legal financial institutions: Nanchang Rural Commercial Bank and Yumin Bank. This “regulatory experience + local coordination + direct institutional management” setup breaks the traditional “regulation separate from enterprise” model, forming an efficient governance pattern of “professional leaders managing professional institutions.” For Yumin Bank, having a vice mayor with provincial financial regulation experience directly overseeing it allows precise connection with higher authorities like the China Banking and Insurance Regulatory Commission and the provincial financial regulatory bureau, facilitating policy communication and transmission. It also enables leveraging local government resources to address practical issues in capital supplementation, risk disposal, and business expansion, providing solid support for its transformation and development.

The inclusion of Yumin Bank into the local government’s management system is rooted in a fundamental change in its ownership structure and governance attributes. As Jiangxi’s first private bank opened in 2019 and the 18th nationwide, Yumin Bank was initially initiated by leading Jiangxi private enterprises such as Zhengbang Group and Boneng Industrial, adhering to regulatory requirements of “domestic, private, and provincial.” However, as the original largest shareholder Zhengbang Group faced liquidity issues, in August 2024, the China Banking and Insurance Regulatory Commission approved Nanchang Financial Holdings Co., Ltd. (a platform under Nanchang Investment Group) to acquire Zhengbang’s 30% stake. Nanchang Financial Holdings thus became Yumin Bank’s largest shareholder, marking the first case nationwide of regulatory approval for state capital entering a private bank.

This shareholding change signifies Yumin Bank’s shift from “purely private” to a “state-led, private enterprise participation” mixed ownership structure. Nanchang Investment Group, as a core state-owned enterprise reorganized by the Nanchang municipal government, is effectively controlled by the Nanchang municipal government. Its entry creates a close capital tie between Yumin Bank and the local government. Meanwhile, Nanchang Rural Commercial Bank had already undergone similar reforms: in 2023, it introduced state-owned enterprises like Nanchang Financial Holdings and Nanchang Transportation Investment through two rounds of capital increase, with state-owned shareholding reaching nearly 38%. By 2025, it officially separated from the provincial cooperative system, with management transferred to the Nanchang municipal government.

Against this backdrop, Xu Hefei oversees both Yumin Bank and Nanchang Rural Commercial Bank, forming a unified governance model of “municipal state-owned capital-led + direct local government management.” Both banks are important local legal financial institutions, and their inclusion under unified oversight facilitates coordinated financial resource allocation and service to the local real economy. Additionally, through state-owned platform holdings and professional leadership oversight, the “ownership and management responsibilities” are aligned, addressing issues such as weak shareholder strength, loose governance, and unclear risk disposal responsibilities that have plagued private banks, and building a modern financial governance system of “capital-led, administrative coordination, and professional regulation.”

The vice mayor overseeing Yumin Bank also signals an important policy shift toward optimizing private bank regulation and localized management reform. Historically, private banks adhered to principles of “domestic, private, and provincial,” mainly relying on private capital, but industry development has revealed issues such as weak capital replenishment ability, insufficient risk resistance, and unstandardized corporate governance. Especially during economic transformation, some private shareholders under operational pressure tend to transfer risks to banks, affecting financial stability.

In this context, regulators have gradually adjusted their approach to private bank shareholder entry and governance, allowing local state-owned capital to participate appropriately in risk resolution and governance optimization. From Yumin Bank to Anhui Xinan Bank and Wuxi Xishang Bank, local state-owned capital’s entry into private banks has become an industry trend. Nanchang’s practice exemplifies this policy orientation: stabilizing shareholding structures through state capital entry, strengthening risk disposal and territorial responsibility via local government oversight, and promoting banks to return to their original mission of “serving the local community and small micro enterprises” through professional leadership.

Currently, Yumin Bank still retains several high-quality private shareholders such as Boneng Industrial. Its mixed ownership structure preserves the flexibility and innovation of private mechanisms while injecting stability and standardization from state capital. Since Xu Hefei’s oversight, he has repeatedly visited Yumin Bank for research and guidance, urging it to strengthen party leadership, optimize assessment systems, and focus on inclusive finance breakthroughs, encouraging the bank to deepen local market engagement under controlled risk conditions. This model differs from the loose governance of traditional private banks and the administrative management of state-owned banks, exploring a new development path of “local government coordination, state-private synergy, and market-oriented operation.”

Of course, Yumin Bank still faces phased challenges. The risks associated with the original private shareholders’ equity have not been fully cleared, large-scale equity auctions have attracted market attention; operationally, profit and asset quality need improvement amid industry net interest margin compression and loan assistance adjustments. However, with the advantages of state ownership and direct local government management gradually emerging, these issues are being addressed in an orderly manner. Nanchang Financial Holdings, leveraging local financial resources, provides capital support, risk control experience, and business synergy for Yumin Bank; local government coordination helps connect the bank with local industries, small micro enterprises, and livelihood finance needs, creating a differentiated competitive advantage.

From Nanchang Rural Commercial Bank to Yumin Bank, Nanchang is building a “sample matrix” of local financial institution reform. The vice mayor’s oversight of Yumin Bank is not a return to administrative intervention but an organic combination of professional governance, territorial responsibility, and market operation. This practice offers replicable experience for resolving private bank risks and improving governance structures, and explores new paths for local governments to coordinate financial resources and serve the real economy. With ongoing reforms, Yumin Bank is expected to shed its past difficulties and grow into a specialized, professional modern legal bank serving Jiangxi and deepening its roots in Nanchang, injecting new momentum into high-quality local financial development.

Personal opinion, for reference only.