Government Overhaul of Chengdu Rural Bank Nears Completion

Anbang took control of CBRC in 2011 and Wu, the group’s founder and biggest shareholder, used the lender as one of the vehicles to fund his global spending spree that ultimately brought the insurer to its knees.

The rehabilitation of troubled Chengdu Rural Commercial Bank Co. Ltd. (CRCB), one of the financial vehicles of fallen tycoon Wu Xiaohui, has taken another step forward with the appointment of two key personnel to the lender which is now under the control of the local government.

Liang Qizhou, previously the head of the Chengdu Municipal Financial Regulatory Bureau, has been named as the bank’s party secretary and Huang Jianjun, a former vice president of another local bank, Bank of Chengdu Co. Ltd., has been nominated as president, sources close to the matter told Caixin. Huang, 44, recently resigned as a vice president of Bank of Chengdu owing to a “work adjustment,” the lender said in a June 13 filing (link in Chinese) to the Shanghai Stock Exchange.

The appointments fill out remaining gaps in the bank’s senior management which has been slowly reshuffled since the government of Chengdu, the capital of southwestern Sichuan province, finally took control of the lender in April through several investment vehicles including Chengdu Xingcheng Investment Group Co. Ltd. The local authority bought the bank from Anbang Insurance Group Co. Ltd., a once-highflying financial conglomerate which was taken over by regulators in February 2018 amid concerns that its reckless debt-fueled expansion posed intolerable risks to the country’s financial system.

Although regulators put Anbang’s stake in CRCB up for sale in August 2018, it took almost two years to complete the disposal as regulators struggled to untangle a web of shareholdings and clear up the ownership of the bank’s assets. Although some private companies had expressed an interest, negotiations came to nothing and eventually Anbang’s stake was sold in tranches to state-owned enterprises and other investment vehicles owned by the local government. The Chengdu State-owned Assets Supervision and Administration Commission holds 56.9% through five companies, with Chengdu Xingcheng Investment Group Co. Ltd., an investment firm, the largest single shareholder (link in Chinese) with a 35% stake. Other state-owned enterprises owned by two district-level governments in Chengdu own a combined 20.5%.

The China Banking and Insurance Regulatory Commission, which oversaw Anbang’s restructuring, installed Xie Shaobo as interim chairman in December, the bank said in a January announcement (link in Chinese). Xie was sent in from Ping An Bank Co. Ltd. to oversee the bank’s risk management and replaced Chen Ping, who resigned as his contract expired. The bank hasn’t publicly announced the appointment of a permanent chairman.

Liang, 53, has more than 30 years’ experience working in the government with a focus on finance and policy, although he appears to have no experience working in a bank. He was appointed head of the Chengdu Municipal Financial Regulatory Bureau in January 2019.

CRCB “was controlled by Anbang for so many years and it created a big hole and now the government needs to scrape the poison off the bone,” a source with another local bank told Caixin. “It makes sense to send someone in from a government department who is more familiar with the financial industry.”

The bank released its 2019 annual report (link in Chinese) June 30 which showed its operating income rose 8.8% to 12.44 billion yuan ($1.6 billion) and net profit attributable to shareholders grew 4% to 4.73 billion yuan in 2019. At the end of December, the bank’s nonperforming loan ratio stood at 1.76%, up from 1.7% at the end of 2018, and its capital adequacy ratio rose to 13.37% from 12.15% at the end of 2018, according to the annual report.

Wu Hongyuran and Lin Jinbing contributed to this report.

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Nerys Avery (nerysavery@caixin.com)

Caixin Global has launched Caixin CEIC Mobile, the mobile-only version of its world-class macroeconomic data platform.

If you’re using the Caixin app, please click here. If you haven’t downloaded the app, please click here.