Unit of China's state-owned ICBC to take 10.82% stake in Bank of Jinzhou (updated)

Bank of Jinzhou Co

28/07/2019 11:12

(Adds comment, detail, background)
    BEIJING, July 28 (Reuters) - The Industrial and Commercial
Bank of China (ICBC),  601398.SS   1398.HK , the country's
largest lender by assets, said on Sunday that one of its unit
had signed an equity transfer agreement to invest in the
troubled Bank of Jinzhou  0416.HK .
    The state-owned bank's unit, ICBC Financial Asset Investment
Co, will invest up to 3 billion yuan ($436 million) in a 10.82%
stake of Bank of Jinzhou, the ICBC said in a statement filed to
the Shanghai Stock Exchange. 
    The investment appeared to be the latest state-led bid to
support a highly indebted smaller banks to contain financial
risks.
    "The investment is to serve country's supply-side reform in
the financial sector, and enhance the bank's capability to serve
the real economy," the ICBC said in its statement. 
    The deal will be conducted with the unit's own funds, ICBC
added.   
    In May, a shock government-led takeover of little-known
Baoshang Bank revived concern about the health of hundreds of
small lenders as the slowing economy results in more sour loans,
testing their capital buffers and draining their reserves. 
    Concern has been growing about Bank of Jinzhou since the
Hong Kong-listed lender suspended trading in its shares this
year in Hong Kong and saw its auditor quit. 
    On Thursday, Bank of Jinzhou said it was in talks with
multiple parties for possible investments.  urn:newsml:reuters.com:*:nL4N24Q263
    Sources told Reuters a day earlier that regulators recently
met financial institutions to discuss measures to deal with
liquidity problems at the bank.  urn:newsml:reuters.com:*:nL4N24P31K
($1 = 6.8785 Chinese yuan renminbi)

 (Reporting by Cheng Leng and Catherine Cadell
Editing by Robert Birsel)
 ((cheng.leng@thomsonreuters.com; +8610-5669-2129;))