Unit of China’s sovereign wealth fund takes over Xiao Jianhua-linked HengFeng Bank in third case of nationalisation since May
- Central Huijin Investment will invest in HengFeng Bank to increase its capital adequacy ratio, improve its management and enhance its operational capability, according to a report by Shanghai Securities News
- HengFeng is among more than a dozen city-level and rural lenders that had been put on notice by the authorities for a shake-up
Central Huijin Investment, a subsidiary of the China Investment Corporation that acts as the Chinese government’s shareholder in the country’s four biggest banks, has emerged as a strategic investor in HengFeng, according to a brief report overnight by Shanghai Securities News, published by state news agency Xinhua.
The investment was a breakthrough in HengFeng’s debt restructuring led by the Shandong provincial government, the state-owned newspaper said, without citing a source or providing financial details. Huijin’s investment would increase HengFeng’s capital adequacy, improve the troubled bank’s management and enhance its operational capability, the paper said.
HengFeng, based in Yantai city, was founded in 1987. It operated 18 branches and 306 sub-branches across the country. It is among more than a dozen city-level and rural lenders that had been put on notice by the authorities for a shake-up, as regulators step up their programme of cleaning up financial malfeasance and profligate lending.
Singapore’s United Overseas Bank (UOB) wants to sell its 13 per cent stake in HengFeng, which it bought in 2008, according to a report by Bloomberg earlier this year. UOB, the second largest shareholder of HengFeng, said it planned to deploy capital by increasing the number of its own branches in mainland China.
A page on UOB’s website, last seen in August 2017, that used to feature HengFeng Bank, also known as Evergrowing Bank, has been removed. UOB could not be reached for comment.
