The incoming Bank of China boss has defended lending policies at its Hong Kong branch, claiming it has stringent procedures preventing individual managers approving large advances without approval.
His move to buttress confidence in the bank's internal controls followed the apparent sudden departure of BOC Hong Kong (Holdings) chief executive Liu Jinbao amid reports he was linked to questionable loans.
Xiao Gang, chairman and president of Bank of China, who is also chairman of BOC, declined to be drawn on whether the bank's Shanghai branch was subject to an internal audit over past lending practices.
Mr Liu, the general manager of the bank's Shanghai branch between 1994 and 1997, was relieved of all his local duties at the Hong Kong branch this week. He remains the Bank of China's vice-chairman.
Reports linked Mr Liu's departure to his time at the Shanghai branch and alleged problem loans granted to Shanghai Land Holdings' chairman Chau Ching-ngai.
After BOC's shareholders meeting yesterday, Mr Xiao would not confirm if the bank had made a loan to Mr Chau or that Shanghai Land was its customer, citing client privacy protection.