China's c.bank approves business operations of newly revamped Baoshang Bank (updated)

Huishang Bank

30/04/2020 13:14

(Adds background, details)
    BEIJING, April 30 (Reuters) - China's central bank said on
Thursday it had approved business operations of Mengshang Bank
to take over the assets and operations of Baoshang Bank.
    Chinese financial regulators took control of Baoshang in May
last year citing "serious" credit risks, and have since pushed
forward the restructuring plans of the lender. urn:newsml:reuters.com:*:nL4N2302JN
    Baoshang's assets, liabilities and operations within the
Inner Mongolia region will be taken over by Mengshang, while its
four branches outside the region will be taken over by Huishang
Bank  3698.HK , the central bank said in a online statement.
    The government of China's Inner Mongolia Autonomous Region
and several state-owned firms in Baotou, a major city in the
region, will lead the acquisition of about 52.5% of Mengshang
Bank, Baoshang Bank revealed in a synchronized statement on
Thursday.  urn:newsml:reuters.com:*:nL4N29Q1LZ
    The Anhui-based Huishang Bank will take a 15% stake of
Mengshang, while a national deposit insurance fund managed by
the central bank will assume 27.5%. 
    Huishang said in February it would take over assets and
business worth 106.5 billion yuan ($15.11 billion) of Baoshang's
Beijing, Shenzhen, Chengdu and Ningbo branches, and planned to
raise up to 20 billion yuan from bonds to keep its liquidity
healthy after the takeover.  urn:newsml:reuters.com:*:nL4N2A63FV
    "Mengshang will fully leverage the management experience of
state-owned lender and listed lender to serve local customers
and focus on business in Inner Mongolia," Baoshang's statement
said. 
    Baoshang's over-expanded business footprints and risky
investment outside the Inner Mongolia region were blamed by the
regulators for the bank's misuse of funds and loans. 
    Qiao Junfeng, ex-vice president of China Construction Bank's
(CCB)  0939.HK  601939.SS  Inner Mongolia branch, was named as
president of Mengshang Bank, while Yang Xianfeng, another
veteran banker who used to work for CCB, was named Mengshang's
chairman, according to the central bank.
    CCB was entrusted by the financial regulators to handle the
business operations of Baoshang after their takeover in May last
year. 
    The registration capital of the new Mengshang Bank is 20
billion yuan, according to a separate Thursday statement
released by the central bank.
    All wealth management products sold to retail and inter-bank
investors by Baoshang will be taken over by the revamped
Mengshang, the central bank added. 
($1 = 7.0480 Chinese yuan renminbi)

 (Reporting by Cheng Leng, Yawen Chen and Se Young Lee
Editing by Mark Heinrich)
 ((cheng.leng@thomsonreuters.com; +8610-5669-2129;))