Dow Jones - China’s banking watchdog has fined a bank more than $100m for its role in a bond default last year, one of the largest penalties levied on a Chinese bank and a sign Beijing is ramping up a crackdown on ways banks have been hiding risks.
The China Banking Regulatory Commission said that China Guangfa Bank provided illegal guarantees to cover up nonperforming assets and operating losses, helping a borrower cover up bad debt.
The 722m yuan ($109m) fine stemmed from the bank’s involvement in a series of defaults starting late last year totalling over 1bn yuan by Chinese electronics maker Cosun Group.
The case reflected “a major case of collusion” between bank staff and “outside criminals,” the agency said.
The banking regulator has ramped up enforcement this year, meting out 667m yuan in fines in the first 10 months of the year, compared with 270m yuan in all of 2016 and 6.3m yuan in 2015.