Date
22 August 2017

China Credit Trust faces heat over loan product, WSJ says

China Credit Trust Co., a major shadow lender in the mainland, and Industrial & Commercial Bank of China Ltd. (ICBC, 01398.HK, 601398.CN), the nation’s largest bank, are facing growing pressure to bail out investors facing a nearly US$500 million hit on a loan product, the Wall Street Journal reported Sunday. China Credit Trust told investors Thursday that it may take legal action to recoup 3 billion yuan (US$496 million) related to a troubled loan, without specifying against whom, the paper said. Meanwhile, ICBC, which sold products tied to the loan through its bank branches, stands by previous statements that it isn’t responsible for any losses, the report said. The troubled loan has put renewed focus on rapid growth in China’s shadow lending, a category that includes all types of credit outside formal bank channels, the Journal noted. 

– Contact HKEJ at [email protected]

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