Shandong Financial Asset Management Takes Over Troubled Hengfeng Bank
Zhang Yushuo
DATE:  Feb 22 2024
/ SOURCE:  Yicai
Shandong Financial Asset Management Takes Over Troubled Hengfeng Bank Shandong Financial Asset Management Takes Over Troubled Hengfeng Bank

(Yicai) Feb. 22 -- Shandong Financial Asset Management, an investment firm under the Shandong provincial government, has become the majority shareholder of Hengfeng Bank, following a bail-out of the struggling joint-stock commercial lender by government funds in 2019.

Central Huijin Investment, the investment arm of the country’s cabinet, has been given the green light to transfer 15 billion shares in Hengfeng Bank to Shandong Financial Asset Management, the Shandong-based lender said yesterday.

This will make Shandong Financial Asset Management the biggest shareholder in Hengfeng Bank with a 46.61 percent stake, while Central Huijin Investment will have its holdings diluted to 40.46 percent, it added. The exact price, payment method and timeline for the transaction were not given.

Hengfeng Bank, which went public in 2007, had assets of CNY1.4 trillion (USD194.7 billion) as of 2015. But the lender then hit hard times, experiencing major corruption scandals involving two chairmen who were both sentenced to death and accruing substantial non-performing loans.

In 2019, it received a capital injection of CNY100 billion (USD13.9 billion) from Central Huijin Investment, Shandong Financial Asset Management and United Overseas Bank. This investment gave Shandong Financial Asset Management a 32.37 percent stake in Hengfeng Bank, which it then increased to 33.1 percent through a judicial auction.

Shandong Financial Asset Management is the country’s largest local asset management company and is licensed to handle non-performing assets in bulk for financial enterprises within Shandong province.

Hengfeng Bank had assets of CNY1.4 trillion (USD194.7 billion) and liabilities of CNY1.27 trillion as of Sept. 30 last year. It achieved a net profit of CNY4 billion (USD560 million) in the first three quarters.

Editor: Kim Taylor

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Keywords:   Private Enterprises