Harbin Bank shares rise after state takes control in deal worth $2 bln

Harbin Bank Co

18/11/2019 04:07

BEIJING, Nov 18 (Reuters) - Shares of Harbin Bank  6138.HK ,
a midsize lender with links to the troubled conglomerate
Tomorrow Holdings, rose more than 9% on Monday as state-backed
investors became its key shareholders in a $2 billion deal.
    The bank will now be 48%-controlled by two state-controlled
entities - Harbin Economic Development & Investment Co and
Heilongjiang Financial Holdings Group Co - while six private
shareholders have dropped their stakes, the lender said in a
filing to Hong Kong stock exchange late on Friday. urn:newsml:reuters.com:*:nFWN27V0HH
    The total transaction will be worth around 15 billion yuan 
($2 billion), or 4.8 yuan per share, the bank said, or more than
three times the shares' Hong Kong close on Friday.
    The change in shareholding marks the latest move by Beijing
to soothe investor concerns about troubled small lenders amid a
slowing economy and a crushing trade war with the United States.
    Earlier this year, Chinese regulators took control of Inner
Mongolia's Baoshang Bank, in which Tomorrow Holdings had an 89%
stake, citing "serious" credit risks and improper and
significant illegal use of bank funds.
    Harbin Bank, also partly owned by Tomorrow, was operating
smoothly at the time, the China Banking and Insurance Regulatory
Commission (CBIRC) had said. 
    The lender, based in China's northern Heilongjiang province,
did not disclose the reason for the change in shareholding in
its latest filing with the exchange. 
    The central bank and the CBIRC did not immediately respond
to Reuters' request for comment.
    The CBIRC has previously said that Tomorrow has been
voluntarily transferring stakes in more that 10 financial
institutions including Bank of Langfang and Taian Bank to new
investors, and risks associated with the group had been
contained.  urn:newsml:reuters.com:*:nL4N23G02H
    The group has been divesting some assets since its chairman
Xiao Jianhua was investigated more than two years ago amid a
state crackdown on systemic risks posed by financial
conglomerates. The billionaire has not been seen since 2017.
    Shares of the Hong Kong-listed lender, which hit a high of
HK$1.65, was up 6.62% at HK$1.61 as of 0338 GMT.
 ($1 = 6.9941 Chinese yuan)
 ($1 = 7.8295 Hong Kong dollars)

 (Reporting by Cheng Leng and Ryan Woo; Editing by Himani
Sarkar)
 ((cheng.leng@thomsonreuters.com; +8610-5669-2129;))