Quick Take: Three Banks Fined $28.77 Million For Regulatory Violations
China’s banking and insurance regulator slapped fines totaling 182.9 million yuan ($28.77 million) on three major commercial banks for violations, as the country steps up efforts to rein in financial risks and market misconduct.
China Merchants Bank was fined 65.7 million yuan, while Industrial Bank was fined 58.7 million yuan and Shanghai Pudong Development Bank was fined 58.5 million yuan, regulator said Friday.
The banks “seriously violated the principal of prudent operation,” the regulator said.
Caixin learned that the regulator uncovered misconduct related to wealth management product sales, interbank business, shareholding structure and other issues during on-site inspections of the three banks last year.
The banks hold the top positions among China’s 12 listed joint stock commercial banks in terms of assets, according to company financial reports. All of them have investments accounting for nearly half of their total assets.
The banking and insurance regulator also accused Pudong Development Bank and China Merchants Bank of issuing irregular loans to affiliated parties. Industrial Bank was blamed for flaws in disclosure of connected-party transactions. The regulator didn’t elaborate on the banks’ violations.
The banks’ respective financial reports show that all three banks have major shareholders backed by embattled private conglomerates that fell under regulatory scrutiny for risky financial market investments. Industrial Bank is 4.68% owned by Tomorrow Holding Group through two units. Pudong Development Bank is 19.81% held by Tomorrow Holding-backed Funde Sino Life, while China Merchants Bank is 11.63% owned by Anbang Insurance Group.
Contact reporter Han Wei (firstname.lastname@example.org)
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