Regulators in China discuss liquidity issues at Bank of Jinzhou - sources

Bank of Jinzhou Co

24/07/2019 13:08

SHANGHAI, July 24 (Reuters) - Officials from the local
branch of China's central bank and other regulators recently met
financial institutions in Liaoning province to discuss measures
to deal with liquidity problems at troubled Bank of Jinzhou
 0416.HK , sources told Reuters.
    The People's Bank of China introduced a credit risk hedging
tool on June 10 for holders of debt issued by the Hong
Kong-listed bank, the latest measure by regulators to calm
market jitters about the health of smaller banks after a rare
state takeover of less-known Baoshang Bank.
    However, lingering concerns about liquidity conditions at
Bank of Jinzhou, headquartered in Liaoning, prompted regulators
in the province to call the meeting, three sources with
knowledge of the matter said.
    "Many interbank institutions might have blocked Bank of
Jinzhou as a counterparty, which will likely wear the bank down.
Regulators hope that the market keeps on doing business with
Bank of Jinzhou and helps it pull through. So, currently they
are discussing measures to resolve its liquidity problem," one
source said.
    Another source said one of China's "big four" state-owned
banks was likely to play a role, but added "the plan has not
been finalized yet".
    All three sources declined to be identified because they
were not authorized to speak about the meeting.
    Bank of Jinzhou said in early June that its auditor EY had
quit before signing off on the bank's 2018 accounts, after being
unable to agree with the bank on the actual usage of some loans.
    Total assets at Bank of Jinzhou stood at 748.39 billion yuan
by end-June 2018, while its net profit was up 7.7% year-on-year
to 4.3 billion yuan, according to bank's semi-annual report in
2018. The bank delayed the release of its annual report of 2018.
 

 (Reporting by Li Zheng, Hou Xiangming, Cheng Leng and John
Ruwitch; editing by Nick Macfie)
 ((john.ruwitch@tr.com; +86 21 6104 1786; Reuters Messaging:
john.ruwitch.thomsonreuters.com@reuters.net; Twitter:
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