Banking News
- Auditors find irregular loans at two banks
Date: 28-Jun-2007 Sources: (Shenzhen Daily)
CHINA Merchants Bank Co. and Bank of Communications Co. said in separate statements yesterday a routine check by government auditors last year uncovered lending irregularities at some of the banks' branches.
Both banks said they don't expect the irregularities to have any impact on their operational results, or have a material impact on past earnings.
Bank of Communications, China's fifth-largest bank by assets, said it has recovered most of the irregular loans and taken adequate asset protection measures against outstanding loans.
China Merchants Bank, the nation's sixth-largest lender by assets, said all loans that were misappropriated or didn't comply with regulations have been recovered or settled since they were discovered by auditors. It didn't give specific figures.
The National Audit Office found that some loans approved by China Merchants Bank didn't meet credit approval standards, the Hong Kong and Shanghai-listed bank said in a statement.
Auditors also found improper accounting of income or expenses and misappropriation of loans, the Shenzhen-based bank said, without giving details.
The bank said there was also evidence of suspected economic crime involving staff of several branches or sub-branches, which are being dealt with by law enforcement agencies. It didn't specify the location of branches or the personnel involved.
Hong Kong and Shanghai-listed Bank of Communications said in a separate statement that auditors found 'certain evidence?of possible economic crimes, which are being dealt with by the relevant law enforcement agencies. It didn't give details.
Citing the audit report, it said individual branches failed to implement strictly the lending policy and financial income and expenditure regulations.
The National Audit Office conducted a routine audit of banks from April to September 2006. Auditors have also found lending irregularities at Bank of China Ltd., which the lender said had been addressed.
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