https://www.wsj.com/articles/another-month-another-chinese-bank-bailout-11564142953?mod=rsswn Beijing dislikes bailing out state companies—particularly banks—but can’t seem to kick the habit. The latest example is Bank of Jinzhou. On Thursday, this small Northern lender said it was in talks with possible strategic investors. The bank has struggled since regulators’ unexpected takeover of one of its peers in late May spooked debt markets. China’s largest state-owned commercial bank and two of the country’s centrally administered “bad banks” are behind the potential investors, according to Chinese financial media outlet Caixin. Regulators also met in recent days to discuss liquidity problems at the Bank of Jinzhou, Reuters reported. What is interesting is the contrast with Baoshang Bank, whose takeover originally sparked the debt market flare-up in June. When regulators first said they were taking control, they were explicit that, retail deposits aside, only liabilities of 50 million yuan ($7.2 million) or less would be fully guaranteed without question. Chinese money markets promptly panicked.
https://www.reuters.com/article/us-...-troubled-smaller-banks-sources-idUSKCN1UL08Q China’s banking and insurance regulator has told the country’s biggest distressed debt managers to prepare contingency plans to take over or invest in high-risk small and medium-sized Chinese banks, two sources involved in the discussions told Reuters. Regulators are broadening out the framework for a rescue of the country’s highly-indebted smaller banks to contain financial risks amid the worst economic slowdown in almost 30 years. The last time a state-owned asset management company (AMC) acquired a stake in a regional bank was in 2016. In May, a shock government-led takeover of little-known Baoshang Bank revived concerns about the health of hundreds of small lenders as the slowing economy results in more sour loans, testing their capital buffers and draining their reserves.