China’s troubled Baoshang Bank will be taken over by local governments and a group of state firms, Reuters reports, citing an unidentified central bank official.
The governments of Inner Mongolia Autonomous Region and Baotou, a major city in the region, will lead the acquisition of at least a 50 percent stake in a reorganized Baoshang Bank, the source was quoted as saying.
State firms in Inner Mongolia will also participate in the takeover, according to the report.
Other strategic investors in the revamped Baoshang Bank are said to include Huishang Bank, China Construction Bank and a national deposit insurance fund managed by the central bank.
Financial regulators took control of Inner Mongolia-based Baoshang Bank last May, citing serious credit risks.
The People’s Bank of China said in November that asset and capital verification work at Baoshang was nearly complete, and that it would restructure the lender as soon as possible.
Reuters reported earlier this month that Huishang Bank planned to take over four branches of Baoshang under a state-led reorganization.
Huishang said recently that it plans to invest up to 3.6 billion yuan (US$524.29 million) to hold up to 15 percent of a newly created provincial commercial bank, without naming the lender.
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