On August 26, the China Banking and Insurance Regulatory Commission announced that it approved Liaoyang Rural Commercial Bank and Liaoning Taizihe Rural Bank to enter bankruptcy proceedings on August 3 and August 4.

On the same day, the Liaoning Banking and Insurance Regulatory Bureau also announced that Liaoyang Rural Commercial Bank had operated in violation of laws, seriously damaging the local financial system.

According to the report, the top four Liaoyang Rural Commercial Bank shareholders have major law and regulation violations. In 2021, the CCP arrested the former president of the bank.

Shenyang Rural Commercial Bank took over the branches, personnel, and deposits of Liaoyang Rural Commercial Bank and Liaoning Taizihe Rural Bank on July 3.

According to Shenyang Rural Commercial Bank’s annual report, as of the end of 2021, the bank’s nonperforming ratio was 6.69%, the provision coverage ratio was 57.68%, and the capital adequacy ratio was 7.1%. All three indicators were lower than regulatory requirements.

In addition, the two bankrupt banks are the parent company and a subsidiary. Taizihe Rural Bank was established by the former Hongwei 宏伟 District Associated Press and later became a subsidiary of Liaoyang Rural Commercial Bank.

In the 2019 annual rating report, Liaoyang Rural Commercial Bank released Liaoning Taizihe Rural Bank as a subsidiary.

Liaoning’s financial market is fraught with risks. Corruption and breaking the law have adversely affected the market.

In the first half of the year, Liaoning Province disposed of $47.4 billion (325 billion yuan) of nonperforming assets of small- and medium-sized banks.According to the China Banking and Insurance Regulatory Commission, since 2021, Liaoning has investigated and arrested 63 top leaders of small- and medium-sized banks. On August 19, the officials of the Liaoning Banking and Insurance Regulatory Bureau were investigated and even expelled from the Party.

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