Fri, June 01, 2012
Business > Industries

NAO discovers lending violations at China Merchants Bank

2012-06-01 11:00:42 GMT2012-06-01 19:00:42(Beijing Time)  Business China

By Ma Nan

China Merchants Bank Co. Ltd. (600036.SH, 3968.HK), the sixth-biggest domestic bank by assets, on Thursday night said in a statement that the National Audit Office (NAO) had found some violations in its deposit and lending business.

The authority conducted an audit of the bank’s financial situation in 2010, the bank said.

China Merchants Securities Co. Ltd., a unit of the lender’s parent China Merchants Group, was also found by the NAO to have committed three significant violations, the statement said.

In the statement, the bank reassured the market that most of the violations had been corrected. The lender has adopted proper measures to alleviate lending risks in order to clear the debt in the future, it said.

Moreover, the violations will not influence the bank’s current performance or book value, the statement said.

The audit was a routine examination the regulator carried out in 2011.

Workers at the securities unit were found to have wrongfully used invoices to claim money back on expenses, while family members of executives cashed in shares in the company that they had not paid for.

In addition, the securities company reduced its fees for financial consulting services due to a lack of relevant regulations.

China Merchants Bank reported Q1 profit of 11.64 billion yuan ($1.8 billion), up 32 percent, with earnings per share of 0.54 yuan.

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