Reborn, back to a small county town to become a wealthy family

Chapter 812 You think I can't beat them?

After Luo Yang explained the whole thing clearly, all the resentment Dong Xuan felt for him being more than an hour late vanished.

"Mr. Luo, I'll be preparing to resign by the end of November."

Although the acquisition won't begin until next year, Dong Xuan needs to be in place early because she is responsible for building the acquisition team.

For a branch manager, leaving the company is not such a simple matter.

In addition to the handover of her work, she also needs to undergo a departure audit by the head office. Only if both of these parts are satisfactory can Dong Xuan leave Yongcheng Bank smoothly.

The departure audit is the most important and also the most time-consuming.

Therefore, Dong Xuan submitted her resignation at the end of November and will not be able to leave until the end of this year.

"It's only the end of August, there's still time."

Luo Yang thought for a moment and said, "When I go back to Yang City next week, I'll keep an eye on the progress of this matter and try to find out the detailed milestones of the credit cooperative's reform so that you can better control the specific timing of your departure."

"I think we shouldn't be in such a hurry."

Dong Xuan was more thoughtful about interpersonal relationships than Luo Yang. She suggested, "If you pursue him too aggressively, it will seem like you're asking for a favor, which will give people a bad impression. Relax a little. People who owe favors will feel embarrassed and will be thinking about repaying the favor."

Luo Yang glanced at Dong Xuan in surprise.

In the past, Dong Xuan would always be the one in a hurry whenever this matter was brought up, but now it's the other way around; she's advising Luo Yang not to be too hasty.
It seems they've been reassured.

“That’s true. Anyway, I’ll be going to Jinling in September, and the leader will be going with me. It will be more appropriate to talk to him about the reform of the credit cooperative then.”

Luo Yang agreed with Dong Xuan's suggestion and said with a smile, "You are more experienced than I am in dealing with people within the system."

“I admit that you are indeed very capable in business, even exceptionally so. However, when it comes to dealing with people, especially leaders within the system, it requires more than just intelligence; it also requires emotional intelligence and accumulated experience.”

Dong Xuan chuckled and said, "If you're better than me in this area, then you're not a genius, you're a monster!"

Luo Yang smiled but didn't respond.

It should be noted that his previous industry also required frequent contact with government departments, so he is not lacking in experience in dealing with leaders within the system.

Now he owns more than a dozen companies, and his interactions with government departments will only increase in the future.

"Boss Luo, can you give me a sneak peek now?"

Seeing that Luo Yang remained silent, Dong Xuan became even more unruly.

She moved her chair closer, placed her hands on Luo Yang's shoulders, and, with a light laugh, asked, "How much money do you plan to invest in this commercial bank?"

Luo Yang put down his chopsticks and lit a cigarette to calm himself down.

Because Dong Xuan was standing way too close, her soft, panting breaths constantly echoed in his ears, making his earlobes feel tingly and numb.
Does this include the funds for acquiring the shares?

To distract from the conversation, Luo Yang quickly changed the subject: "Also, if I inject capital after the acquisition is completed, it will dilute state-owned assets. You should know that this is a very troublesome thing."

As is well known, banks' sources of liquidity include the following aspects.

First and foremost are customer deposits, one of the bank's primary and most stable sources of funding, including both demand deposits and time deposits. Demand deposits offer high liquidity, while time deposits provide relative stability, offering banks longer-term funding support.

Secondly, there is interbank lending, where banks exchange funds for short-term purposes. This method can quickly replenish a bank's liquidity in the short term, but the interest rate is usually relatively high, which will increase the cost of using funds. Moreover, it is a short-term activity, generally used to make up for insufficient bill settlement or to solve temporary working capital needs.

Another option is to borrow from the central bank. Generally speaking, banks can apply for loans from the central bank to meet temporary funding needs.

Neither of these two methods of obtaining funds could meet Dong Xuan's requirements.

Finally, there's the issuance of bonds. Banks can raise funds by issuing financial bonds, which have relatively long maturities.

Moreover, this model has relatively high requirements and is generally applicable to the four major state-owned banks and a few well-known commercial banks in China, since the issuance of financial bonds relies on the bank's creditworthiness.

For the local rural commercial banks acquired by Luo Yang, obtaining working capital by issuing financial bonds is simply not feasible.

"President Luo, you should know that the Yangshi Credit Cooperative is currently in a state of semi-death. Even if the restructuring is completed, it will barely be able to operate, and it will have to rely on local resources to make a living. It is simply impossible for it to achieve expansion in the short term."

Dong Xuan gently whispered the facts in Luo Yang's ear: "To be realistic, Mr. Luo's reason for acquiring a commercial bank is definitely not just to support local economic development or reduce the local government's fiscal debt. Therefore, expansion is imperative, and the first step is to ensure that the commercial bank has sufficient liquidity in a short period of time before we can talk about subsequent development issues."

"so what?"

For Luo Yang, the solution to the problem is simple: leave the professional tasks to the professionals.

"So when you are negotiating the acquisition with the Yangshi local government, it is a must to inject some working capital, even if it will dilute the state-owned assets involved."

Dong Xuan indeed gave advice: "And the second step must follow. After the acquisition is completed, the Shanghai branch must be established immediately. At the same time, you should set up the bank accounts of most of your companies in Shanghai in your own bank's branches. The same applies to Yang City. Only by attracting enough customer deposits can the bank have more working capital."

"Then how much capital do you think would be appropriate to inject?"

"That depends on how big the newly established rural commercial bank is."

Perhaps because they had reached a crucial point in their conversation, Dong Xuan sat back down in her chair and reached into her purse to take out a pack of women's cigarettes.

"The formula for calculating a bank's net assets is total assets minus total liabilities, where owner's equity includes paid-in capital or share capital, capital reserve, surplus reserve, and retained earnings. This formula is the same as that for general enterprises."

After lighting a cigarette, Dong Xuan said seriously, "This includes all the bank's assets, such as deposits, loans, and securities investments. Determine the total liabilities: This includes all the bank's liabilities, such as deposits, loans, and bond issuance. Calculate net assets: Subtract the total liabilities from the total assets, and the result is the bank's net assets."

A long string of technical terms came out of her mouth, and because she spoke quite fast, Luo Yang didn't understand it all at first.

"Let me give you an analogy. Suppose a bank has total assets of 1000 billion yuan and total liabilities of 800 billion yuan, then the bank's net assets are 200 billion yuan."

Dong Xuan knew she had spoken too professionally and too quickly, so she used a simple analogy to summarize: "This net asset value reflects the net value of a bank after deducting all liabilities. It is one of the important indicators for assessing a bank's financial condition and profitability, also known as the 'big picture'."

"Based on your statement, I estimate that the scale of rural commercial banks after the reform will be very small."

Luo Yang said with a wry smile, "It could even be a negative asset."

Based on his understanding of the current situation of Yangshi Credit Cooperative, if it weren't for the local government supporting it, it would have gone bankrupt and been liquidated long ago due to insolvency.

“If it was going to go bankrupt, it would have gone bankrupt long ago. Why bother thinking about restructuring?” Dong Xuan smiled at Luo Yang and said, “You should know that before the restructuring, rural credit cooperatives were not commercial banks, so it was possible to carry out policy-based divestiture of non-performing assets.”

"Is this still possible?"

This is Luo Yang's blind spot in knowledge, so he doesn't understand it at all.

"Policy-driven divestiture refers to the strict policy regulations imposed by the state on the scale, scope, conditions, and completion time of non-performing asset divestiture. Fund clearing between state-owned commercial banks and asset management companies is carried out in stages within a specified time, with the local offices of banks and asset management companies as the basic clearing units. State-owned banks receive consideration from the national treasury based on the book value of non-performing assets and on-balance-sheet interest."

Dong Xuan explained professionally, "This method has the nature of a government-mandated transfer of state-owned assets and should not be treated as a general civil legal relationship. Therefore, non-performing assets will be transferred to asset management companies established locally."

"Yangshi is just a small fourth or fifth-tier city, would it have such an organization?"

Although Luo Yang didn't have professional knowledge in this area, he still had a basic understanding, so he asked, "If it's not there, then it means the separation can't be performed?"

"When a local government needs it, it can have it."

Dong Xuan winked at Luo Yang and said with a smile, "As long as the State-owned Assets Supervision and Administration Commission or an institution like the Financial Office still exists in the local area."

The State-owned Assets Supervision and Administration Commission (SASAC) definitely has such a system, even in small cities like county-level cities.

"So you think that the reformed rural commercial banks still have a certain market share?"

After Dong Xuan's explanation, Luo Yang changed his mind.

"Yes, there should be some market activity."

After thinking for a moment, Dong Xuan replied, "After all, it is a developed region in southern Jiangsu. I think the net assets are likely to be between one billion and two billion yuan, if the local government has done a good job of removing non-performing assets during the restructuring."

"Between one billion and two billion?"

Luo Yang was stunned for a moment after hearing the number, and then said, "If I want to achieve controlling interest, wouldn't I have to invest seven or eight hundred million to more than a billion?"

"It depends on the specific distribution of equity in commercial banks after the reform."

Based on her experience, Dong Xuan analyzed: "Generally speaking, if you can control about 30% to 40% of the shares, you can basically control the operation and management of this commercial bank. This is because the total size of this commercial bank in Yang City is small. If it were a larger commercial bank, you could control the operation and management by holding about 20% to 25% of the shares."

She suddenly stopped talking at this point.

With a slim cigarette between her fingers, Dong Xuan slowly looked at Luo Yang: "Mr. Luo, you're a billionaire boss with assets worth tens of billions. Perhaps you'll be able to take it a step further next year. You can't possibly be short of such a small amount of money, can you?"

"hehe."

Luo Yang was too lazy to answer, and just chuckled a few times.

He then gave Dong Xuan a look that said, "You figure it out yourself."

"Oh dear, people get confused when they're concerned!"

President Dong immediately stubbed out his cigarette, leaned closer to Luo Yang again, and took his arm with both hands, saying, "Besides, my mind is still on the development of the bank. In the end, I'm still working for you to make money, so it's inevitable that I have some selfish motives."

"Be direct."

Luo Yang maintained his cold expression and said, "Just tell me how much money you need to prepare."

Dong Xuan kept staring at Luo Yang's facial expression, but didn't notice any change. After a full minute or two, she said somewhat awkwardly, "We should prepare about 15 billion yuan. Of course, this is just a current estimate and not very accurate. We will be able to give you the specific figure after I have assembled the acquisition team and conducted a preliminary investigation of Yangshi Rural Commercial Bank."

A cash flow of 15 billion is not a small amount, whether in 2012 or 2022.

Moreover, this sum of money exceeded Luo Yang's budget. Just a few months ago, he believed that acquiring half of the shares of Yangshi Rural Commercial Bank would only cost 3-4 million yuan, but now it had suddenly increased to 15 billion yuan.
It's not that Luo Yang can't come up with the money. In addition to the large income from the US crude oil futures market, he will also sell Lemon CC in the first half of next year, which will give him nearly 50 billion yuan more in cash flow. So he is not short of money.

However, this sudden overspending made Luo Yang feel somewhat uncomfortable.

We need to find a way to make up for it.

Gray Rhino Capital is involved in the stock and futures markets, and by next year, the funds raised from the issuance of fund products will be invested in US technology stocks, which will be for long-term investment. It is impossible to make huge profits in the short term.

Luo Yang racked his brains, trying to find the information he needed from the fragments of memory.

When he fell silent, Dong Xuan became anxious.

But seeing Luo Yang deep in thought, she didn't dare disturb him and could only light another cigarette.

While observing, he quietly picked up his phone, opened WeChat, and typed a message of a few dozen words with one hand before sending it out.
Bitcoin!

From the stock market to futures, all information related to high-profit investments flashed through Luo Yang's mind.

He suddenly remembered that he would spend one or two million dollars of his spare money to buy Bitcoin every year.

"How much is it now?"

Luo Yang recalled that in the past few years, Bitcoin experienced a surge, with its price skyrocketing from a dozen US dollars to over a thousand US dollars per coin, a nearly 100-fold increase.

Thinking of this, he picked up his phone and dialed Wen Wan's number.

The call was answered in less than 5 seconds.

"Please help me check the price of Bitcoin from January 2011 to now. I don't need a lot of details, just the lowest and highest prices during this period, and the current price."

Luo Yang gave a direct order: "Give me the results in half an hour."

Wen Wan's reply over the phone was also concise: "Okay, boss, I'll give you the result in half an hour."

"We can prepare 15 billion yuan for you."

After placing the phone on the table, Luo Yang looked at Dong Xuan and said, "If the subsequent evaluation shows that more funds are needed, then you will have to compete with the new energy vehicle project, the smartphone project, the newly established food group, and the Guobao Film and Television project, which is preparing to expand, for funding allocation."

"Competing with Wen Wan, An Ying, and Song Wan for fund allocation?"

Dong Xuan raised an eyebrow, her confident eyes carrying a hint of allure: "You think I can't outcompete them?"

(End of this chapter)