(Yicai) Aug. 22 -- Twelve small and mid-sized Chinese banks have been given the go-ahead to make changes in their shareholders’ stakes this month to fortify risk management.

The group consists of five urban commercial lenders and seven rural banks, including Bank of Rizhao, Bank of Wenzhou, and Fujian Haixia Bank, according to recent notices posted on the website of the National Administration of Financial Regulation.

For the urban commercial banks, the changes mostly involve their state-owned shareholders or other local state firms taking bigger stakes, while for the rural banks, it mostly entails their main sponsor banks lifting their equity holdings.

For example, state-owned Shandong Port Investment Holding is set to hike its stake in Bank of Rizhao to 13.3 percent by buying equity from other investors, turning itself into the second-largest shareholder of the regional urban bank.

With state enterprises as major shareholders, the capital replenishment pressure on regional urban banks is eased and they can consolidate their client resources and forge better business synergy with local state firms, a banking industry insider told Yicai.

The rural banks are adjusting their shareholder structures to comply with a regulatory rule that requires their largest stockholder to be a banking entity and hold at least 51 percent of all shares.

For example, Wenzhou Ouhai Rural Commercial Bank took full ownership of Shijiazhuang Xinhua Hengsheng Village Bank, up from 45 percent, as other investors transferred shares to the Zhejiang province-based lender.

Both types of bank aim to secure more concrete shareholder support to supplement their capital and defuse operating risks through the process, the insider added.

Rural banks’ regulatory compliance speeded up recently, an analyst told Yicai. With capital injected by the main shareholder, the risk control capability of the smaller rural bank has been greatly improved, while at the same time, the main investor gained a more concrete footing in its subsidiary rural bank, the person said.

Editors: Tang Shihua, Emmi Laine