StanChart-linked China Bohai seeks to dispose of $4 bln in bad loans

China Bohai Bank

22/07/2024 03:28

By Selena  Li
       HONG KONG, July 22 (Reuters) - China Bohai Bank
 9668.HK  said on Monday it is looking to sell 29 billion yuan
($3.99 billion) worth of non performing loans as the faltering
Chinese economy and deepening property sector problems pressure
lenders to dispose of bad assets.
    The bank, 16.2% owned by British lender Standard Chartered
 STAN.L , expects a financial hit of 3.9 billion yuan from the
sale, the bank said in a statement on the Hong Kong Stock
Exchange.
    It added it should receive no less than 17.7 billion yuan
for the transaction.
    Bohai Bank is looking to get large soured loans off its
balance sheet and said there are six potential buyers including
China Orient Asset Management and China Cinda Asset Management.
    China's economy grew much slower than expected in the second
quarter with the worsening property market continuing to weigh
on smaller banks that are more vulnerable to private sector
loans.
    Foreign banks are feeling the pinch of Chinese lenders'
deteriorating businesses.
    StanChart had taken a total of $850 million in writedowns in
the last few quarters on its stake in Bohai Bank and said in May
it remained cautious about the sector as residential sales
volumes continue to decline.
   The Hong Kong-listed lender's share price has shrunk 80%
since its listing in 2020.
    The net profit of the Tianjin-based Chinese lender in 2023
is down 17% from a year ago, its annual report shows.

($1 = 7.2695 Chinese yuan)

 (Reporting by Selena Li in Hong Kong; additional reporting by
Ziyi Tang in Beijing; Editing by Sam Holmes)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))