China Construction Bank Has 3 Billion Yuan Exposure to Bankrupt Firm - Report

Date : 07/11/2012 @ 3:05AM
Source : Dow Jones News
Stock : Citigroup, Inc. (C)
Quote : 62.07  0.12 (0.19%) @ 6:44PM

China Construction Bank Has 3 Billion Yuan Exposure to Bankrupt Firm - Report

Citigroup, Inc. (NYSE:C)
Historical Stock Chart

5 Years : From May 2012 to May 2017

Click Here for more Citigroup, Inc. Charts.

China Construction Bank Corp. (0939.HK), the country's second-largest bank by assets, has a more than 3 billion yuan ($471 million) exposure to a private company that has filed for bankruptcy in eastern China, Caixin magazine reported, citing unnamed sources at the bank.

In its latest edition published Monday, Caixin said that China Construction Bank's Zhejiang provincial branch had lent the funds to Zhejiang Zhongjiang Holding Co., a Hangzhou-based company engaged in property, trade, manufacturing and investment. The company filed for bankruptcy in January.

The magazine, citing several unnamed sources, said that the bank's Zhejiang branch had extended only CNY1 billion of the credits to Zhongjiang at the end of 2010, but the loan exposure grew rapidly in 2011 despite the company's deteriorating financial condition.

Officials at the China Construction Bank declined to comment on Wednesday, saying that the issue is being dealt with by the judicial system.

Zhejiang Zhongjiang was hit by the credit crunch that swept through coastal Zhejiang province late last year, according to local media reports. Zhejiang is a center of private business that is closely tied to exports, now feeling the effects of falling demand in major overseas markets.

The combined effect of sluggish overseas demand and a surge in rates in the unofficial -- or gray market -- lending system has hobbled a number of private businesses in Zhejiang province since late 2011. A recent investigation by the city government of Hangzhou found that Zhongjiang has debt of roughly CNY8 billion, including CNY5 billion of bank loans, Caixin said in its report.

Cui Binzhou, president of China Construction Bank's Zhejiang provincial branch, has been removed from his post, the report said, adding that about 40 to 50 employees at the bank's Zhejiang branch have been found responsible for the bad loans. It was unclear what sort of responsibility they had in the matter.

In addition to China Construction Bank, Industrial & Commercial Bank of China Ltd. (1398.HK), Bank of China Ltd. (3998.HK) and Citibank China Ltd. also have loans issued to Zhongjiang, Caixin said.

Bank of China has CNY1 billion of loans to the company, while ICBC has loans of more than CNY150 million while Citibank has tens of millions of yuan loans to Zhongjiang, according to the report.

Newspaper website: http://www.caixin.com

Write to djnews.shanghai@dowjones.com

Latest C Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.