Commercial bank shareholders targeted as China steps up scrutiny
Those with stakes of more than 5 per cent bought through financial products like insurance or asset management schemes must trim holdings within a year
China’s banking regulator has ordered shareholders that have acquired more than 5 per cent stakes in commercial banks through the use of financial products like insurance and asset management schemes to reduce their holdings within a year.
The regulation, dated February 2 but made public late on Friday, is the latest in a series of measures to control risk and excessive leverage in the financial system, with everything from dodgy lending practices to shadow banking under the microscope.
The regulator also said in a separate online statement that it “strictly forbids shareholders from imposing inappropriate control over banks and seeking illegitimate interests”.
The China Banking Regulatory Commission (CBRC) will target small and mid-tier banks’ shareholding structures and conduct on-site checks this year, it said.
The rules will force conglomerates like Anbang Insurance Group, which has built up stakes in commercial lenders through funds raised from short-term, high-yielding universal life insurance products, to trim their holdings.