China's central bank extends control of Baoshang Bank by six months

SHANGHAI, May 23 (Reuters) - China’s central bank said on Saturday said temporary control of Inner Mongolia-based Baoshang Bank will be extended by six months due to the novel coronavirus pandemic.

Chinese financial regulators took control of Baoshang in May last year citing “serious” credit risks, and have since approved Mengshang Bank and Huishang Bank to take over its assets and operations.

The People’s Bank of China said in a statement regulators would extend control of Baoshang - initially set to last for up to a year - to Nov. 23. It added that Mengshang and Huishang’s acquisition plans were proceeding in an orderly manner.

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

The rare takeover, the first in nearly two decades, also highlights the long struggle of some smaller regional lenders in China, which suffer from deteriorating asset qualities, inadequate capital buffers, and poor internal controls and corporate governance. (Reporting by Brenda Goh Editing by Shri Navaratnam)