At least 40 “high-risk” Chinese banks were taken over by bigger institutions in the first six months of this year as small and mid-sized rural lenders “buckle under exposure to debts,” according to a report by Newsweek, which said this figure was four times the number of banks that were shut down in 2023, while financial news agency Yicai Global had noted that industry insiders believed the “trend is only expected to accelerate as restructuring picks up pace.”
Many of the merged banks were embroiled in the real estate crisis that led to a Hong Kong court ordering the liquidation of the massively indebted China Evergrande early this year – 36 of them were in Liaoning province in the northeast, where a financial regulator had given them till December to “complete the termination of legal entities,” the report said. It explained that rural banks have less startup funding, less large shareholders and are often plagued by poor management practices.
Read the full report: Newsweek.
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