Over 13% of Chinese Banks Categorised as High Risk, More than One Third of Rural Lenders: PBOC

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A new report from the Chinese central bank indicates that more than 13% of lenders in China are considered “high risk.”

586 out of 4,379 Chinese lenders were found to be high risk by the People’s Bank of China’s (PBOC) latest “2019 China Financial Stability Report” (中国金融稳定报告(2019)), including over a third of rural lenders.

The report arrives following a tumultuous year for smaller regional lenders in China, with a string of bank runs and upsets which in some cases necessitated intervention from the central government.

Two re­gional banks in China met with abortive bank runs within a two week pe­riod in early November – Yingkou Bank in the north­east­ern province of Liaon­ing and Yichuan Rural Com­mer­cial Bank in Henan province. 

Earlier in the year the Chinese government took over Inner Mongolia’s beleaguered Baoshang Bank in May, for the first such forcible acquisition in more than two decades.

A trio of leading state-owned financial institutions subsequently took over the north-eastern Bank of Jinzhou in July, while state-owned Central Huijing Investment subsequently intervened in the fortunes of Shangdong province’s Hengfeng Bank.

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