UPDATE 1-Chinese regulator to take over Baoshang Bank due to credit risks

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BEIJING, May 24 (Reuters) – China’s central bank said on Friday that the country’s banking and insurance regulator will assume control of Inner Mongolia-based Baoshang Bank due to the serious credit risks that it poses, in a rare takeover of a domestic lender.

The regulator’s control of Baoshang will last a year starting Friday, the People’s Bank of China (PBOC) said on its website.

China Construction Bank (CCB) will be entrusted to handle the business operations of the small lender, based in the industrial city of Baotou, the statement said.

Baoshang Bank came to prominence after its key stakeholder Tomorrow Holdings was targeted in a government crackdown on systemic risks posed by financial conglomerates.

Baoshang had a total of 156.5 billion yuan ($22.68 billion) of outstanding loans by the end of 2016, a 65% jump from 2014-end, according to the bank’s last filing on its assets and liabilities on its website. Its non-performing loan ratio was at 1.68% as of December 2016.

It has not published any annual report since then, citing its plan to seek strategic investors.

In China’s crackdown on systemic financial risks, the banking and insurance regulator took over Anbang Insurance Group in February 2018.

$1 = 6.8998 Chinese yuan renminbi
Reporting by Cheng Leng, Ryan Woo and Beijing Monitoring Desk;
Editing by Nick Macfie and Louise Heavens

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