China rescues the largest “bad bank” after losing 13,558 million – O Journal Economics

China’s state-owned asset manager Huarong, the country’s largest bank with bad debts, on Thursday announced a capital replacement plan, backed by public investment bank CITIC, after incurring losses equal to 13.558 million euros.

According to a company statement cited by economic news portal Yicai, in recent months Huarong has been “cleaning up and disposing of risky assets” acquired during the years of presidency of Lai Xiaomin, who was executed last January after being convicted in what the official press deemed “the largest financial corruption case” in history. country.

Similarly, the pandemic has resulted in some of its clients not being able to fulfill their contracts, causing a “rapid deterioration” in the quality of some assets, which, in addition to other factors, has had a strong impact on public bank accounts.

Its Hong Kong shares exited trading last April.

He told the Board that it would meet on August 28 to approve that document as well as results for the first half of 2021.

Huarong said he is in a “good financial position” and “fully prepared” to pay bond futures, after spending about 63.3 billion yuan (8.34 billion euros) since April to settle past due obligations.

Huarong is one of the four “bad banks” in the Asian country, and was founded in 1999, after the Asian financial crisis, with the aim of getting rid of the Chinese banking system’s bankruptcies, although Lai (2012) reached the consortium began investing in high-risk assets, and the It went public on the Hong Kong Stock Exchange in 2015.

At the end of 2017, Huarong’s net worth was about 182.66 billion yuan (24.065 million euros), although the following year, with Lai’s arrest, the investment capital that had been hidden until then was discovered.