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2009-6-24 10:29:00 p.m. HKT, XFNA
DJ China Audit Office: 6 Banks' 2008 Irregular Loans Over CNY30B
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| BEIJING (Dow Jones)--China's National Audit Office said Wednesday it found that the six Chinese banks it audited last year extended more than CNY30 billion ($4.39 billion) worth of irregular loans in 2008, reflecting weak management at some of the banks' lower-tier branches.
The government body audited Industrial & Commercial Bank of China Ltd. (1398.HK), China Construction Bank Corp. (0939.HK), Bank of China Ltd. (3988.HK), Bank of Communications Co. (3328.HK), China Citic Bank Corp. (0998.HK), and China Merchants Bank Co. (3968.HK).
The audit office said earlier this year that three of China's Big Four state-controlled lenders - ICBC, China Construction Bank and Bank of China - accounted for CNY6 billion of the total irregular loans it discovered.
Of the irregular lending at the six banks, CNY21.5 billion involved improper land purchases, fraudulent mortgages and loans to non-qualifying property developers, the audit office said in a report delivered to a conference of the Standing Committee of the National People's Congress.
The audit also uncovered CNY10.7 billion worth of lending to investment projects that were either not in line with industry policies or didn't have regulatory approval. In addition, CNY4.36 billion worth of loans were misused due to a lack of strict post-lending management, the audit office said.
It didn't provide a breakdown of the irregular loans extended by each of the six banks.
The audit office said the banks have recovered CNY27.3 billion of the irregular loans, and 489 people have been punished following the audit.
-Victoria Ruan contributed to this story, Dow Jones Newswires; 8610 6588-5848; victoria.ruan@dowjones.com
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