Beleaguered regional lender Bank of Jinzhou has announced that one of China’s leading asset management companies has signed up as a third strategic investor.
Bank of Jinzhou has just announced that some of its shareholders will transfer their equity stakes in the north-eastern lender to China Great Wall Asset Management – one of China’s leading asset management companies (AMC).
The move comes just after the Industrial and Commercial Bank of China (ICBC) announced that it would acquire a 10.82% stake in Bank of Jinzhou via its fully invested subsidiary ICBC Investment (工银投资) for a consideration of 3 billion yuan.
China Cinda, another Chinese AMC, also unveiled plans to acquire 6.49% of Bank of Jinzhou equity.
The acquisition of sizeable stakes in Bank of Jinzhou by a big state-owned bank and two AMC’s is expected by analysts to drive the market-based restructuring of Bank of Jinzhou.
“This move helps to maintain financial stability,” said Dong Ximiao (董希淼), chief researcher with XWBank, to the Chinese central bank’s Financial Times.
“Takeover by financial institutions with stronger integrated capability could become a key method for the disposal of financial institution risk in China’s next stage.”
Bank of Jinzhou announced last week that it had entered discussions for a strategic investment, re-igniting concerns about the health of China’s regional banking system just two months following the takeover of Inner Mongolia’s Baoshang Bank by regulators.
In June the Chinese central bank intervened to help Bank of Jinzhou with liquidity difficulties, while one analyst said to Reuters that the north-eastern bank’s problems made it a “bigger bomb than Baoshang.”
Bank of Jinzhou’s equity structure was previously highly diffuse, with all of its main shareholders being private enterprises and no single shareholder holding a stake of more than 5%.
As of the end of June 2018 Bank of Jinzhou’s five biggest shareholders were Hawtai Motor (荣成华泰汽车有限公司) with a 4.68% stake, Zhongqi Fazhan Touzi (Beijing) (中企发展投资（北京）有限公司) with a 4.68% stake, Yinchuan Baota Jingxi Huagong Co., Ltd. (银川宝塔精细化工有限公司) (3.69%), JC Trans (锦程国际物流集团有限公司) (3.15%) and Qingzhou Taihe Mining Co., Ltd. (青州泰和矿业有限公司) (2.65%).
Bank of Jinzhou was established in January 1997 and is headquartered in the Liaoning province city of Jinzhou.
In December 2015 Bank of Jinzhou listed on the Hong Kong Stock Exchange, and its current registered capital is 6.782 billion yuan.