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CITIC Bank Involved in 56 Violations, Fined Over ¥2.24 Billion

TraderKnows
TraderKnows
2023-12-04

The China Banking and Insurance Regulatory Commission (CBIRC) has imposed a historic penalty on CITIC Bank, exceeding 224 million Chinese Yuan.

In the latest financial regulatory developments, the China Banking and Insurance Regulatory Commission (CBIRC) imposed a historic penalty on CITIC Bank, amounting to over 224 million Chinese Yuan. This fine stands out as the highest among a recent series of administrative penalties by the regulatory authority. Additionally, Agricultural Bank of China and China Construction Bank were not spared, facing fines of 27.1 million and 37.91 million Yuan, respectively. These actions signify an enhanced regulatory focus on strengthening oversight within the banking sector.

CITIC Bank's regulatory violations span a wide range, totaling 56 items. These include irregularities in personnel management, improper handling of on- and off-balance sheet loans and wealth management products, issues in interbank and agency business, mismanagement of credit cards, and improper handling of non-performing loans, among various other aspects. These violations have not only inflicted significant financial impacts on the bank itself but also pose a potential threat to the overall stability of the financial market.

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(Source: China Banking and Insurance Regulatory Commission website)

Due to these violations, several senior executives at CITIC Bank have also faced severe penalties. Chen Ying, the then Deputy Branch Manager of the Xiamen branch, has been banned for life from engaging in banking industry activities, while other branch executives received warnings and fines.

It is noteworthy that CITIC Bank has faced fines for regulatory violations multiple times in recent years. From 2018 to 2021, the bank accumulated fines exceeding 90 million Yuan for various infractions.

As of the third quarter of 2023, CITIC Bank's total assets reached 8.92 trillion Yuan, with a net profit attributable to shareholders of 51.433 billion Yuan. However, its operating income decreased by 2.62% year-on-year, indicating certain operational pressures.


In response to the imposed fine, CITIC Bank has stated that all identified issues occurred in 2019 and earlier. The bank has now completed comprehensive rectifications based on regulatory feedback and has taken appropriate actions against the individuals responsible. CITIC Bank emphasizes its sincere acceptance of and firm commitment to implementing the imposed penalties. This reflects the requirements outlined in the Central Financial Work Conference to strengthen financial supervision and prevent and resolve financial risks.

This incident not only highlights the stringent compliance expectations of regulatory authorities for financial institutions but also serves as a reminder to the entire banking industry to prioritize internal management and risk control. CITIC Bank is currently exploring new avenues for loan expansion, shifting towards supply chain finance in industries such as new energy, new infrastructure, and high-end equipment manufacturing, to adapt to market changes and operational challenges.

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