FINANCE

Audit Finds Major Banks Mismanaged Billions in Tech Loans

Published: Jun. 25, 2026 3:12 a.m. GMT+8

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The Industrial and Commercial Bank of China. Photo: VCG

China’s top auditor has reprimanded four major commercial banks for mismanaging technology-focused lending programs, highlighting a persistent disconnect between Beijing’s push to fund strategic innovation and the ingrained risk aversion of state-backed lenders.

Presenting an audit of the 2025 central budget to the National People’s Congress Standing Committee on Tuesday, Auditor General Hou Kai said the tailored financial products offered by the banks failed to meet the urgent needs of innovative enterprises.

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Auditor General Hou Kai reprimanded ICBC, CCB, Bocom, and CITIC Bank for mismanaging tech loans, including 64.2 billion yuan in "innovation points loans" issued without assessing innovation capability.
Of 47.9 billion yuan in IP pledge loans, 10.1 billion yuan relied on traditional collateral; 5.4 billion yuan in M&A loans was diverted to buybacks or routine financing.
194 of 970 specialized tech sub-branches lacked focus; internal performance metrics discouraged adopting higher bad-debt tolerance for small tech firms.

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Industrial and Commercial Bank of China Ltd.: Industrial and Commercial Bank of China Ltd. (ICBC) was among four banks reprimanded for mismanaging tech loans. It issued 64.2 billion yuan in "innovation points loans" without assessing innovation, misapplied IP pledge loans, and diverted 5.4 billion yuan from tech M&A. Many specialized sub-branches lacked genuine tech focus.

China Construction Bank Corp.: An audit of CCB found mismanagement in tech lending: 64.2B yuan in innovation loans issued without assessing innovation capabilities, and IP pledge loans inadequately secured. 194 of 970 tech sub-branches lacked focus. Banks resisted regulatory tolerance for higher bad debt ratios due to internal performance metrics.

Bank of Communications Co. Ltd.: Bank of Communications Co. Ltd. (Bocom) was one of four major Chinese banks reprimanded by auditors in 2025 for mismanaging technology-focused loans. Issues included misapplying innovation points loans and intellectual property pledge loans, diverting M&A funds, and lacking genuine tech focus in sub-branches.

China CITIC Bank Corp. Ltd.: China CITIC Bank was one of four major lenders audited for mismanaging technology loans. It issued 64.2 billion yuan in "innovation points loans" without assessing borrowers' innovation capabilities, misused IP pledge loans, diverted tech M&A funds to equity buybacks, had 194 sub-branches lacking genuine tech focus, and failed to adopt higher NPL tolerance for small tech firms.

AI generated, for reference only