BEIJING (Reuters) - China’s Hengfeng Bank will aim to list in five years after completing a restructuring, state media Xinhua reported a senior bank official as saying, part of government efforts to support indebted smaller banks.
The bank, based in eastern Shandong province, has been undergoing a restructure since 2017 when the banking and insurance regulatory watchdog appointed its staff to head up the lender due to management and liquidity issues.
Former chairman Jiang Xiyun was found guilty of corruption and sentenced to death in December, with a two-year reprieve.
“The risk has been dissolved. The next step will focus on improving corporate management and strengthening risk control... and (the bank) will aim to list in five years,” Chen Ying, Hengfeng’s chairman, said in the Xinhua report on Sunday.
Hengfeng received 100 billion yuan ($14.46 billion) in strategic investment as part of the restructuring process led by local government, in line with government efforts to ease risk in the country’s financial system.
Central Huijin Investment Ltd [SASAWH.UL], an investment arm of country’s sovereign fund, China Investment Corp (CIC), purchased 60 billion yuan of shares in the sale, and Shandong Financial Asset Management, a local government-backed financial asset management firm purchased 36 billion yuan of shares.
Singapore's United Overseas Bank UOBH.SI and other investors bought the remaining 4 billion yuan in shares, it added.
Concerns over Hengfeng were rekindled last year by the state seizure of Baoshang Bank, and the state rescue of Bank of Jinzhou, which sharpened concerns about the health of hundreds of small lenders as China’s economic growth slows to near 30-year lows.
Reporting by Muyu Xu and Shivani Singh; editing by Richard Pullin
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