Three former chairmen of ZYBANK (formerly Zhongyuan Bank), a major city commercial bank in Henan province, have all been removed from office and investigated for corruption, marking a significant case of systemic governance failure within China's financial sector.
The most recent development involves Guo Hao, the bank's third chairman, whose position as a deputy to the Henan Provincial People's Congress was terminated in August 2026 after his dismissal from the bank in May. This follows a similar pattern seen with his two predecessors, Dou Rongxing and Xu Nuojin, and signals a comprehensive, multi-stage accountability process by authorities.
Where to begin
The timeline of the three chairmen's departures reveals a clear "three-stage" procedure: a bank announcement of a "work transfer," followed by a provincial government dismissal, and finally, a removal from the People's Congress or an official announcement from the disciplinary inspection commission. This method was used for both Dou and Xu, appearing to balance market stability with accountability for a publicly traded bank.
Guo Hao's case, however, is unique as he was the only chairman to come from a local government background, having previously served as the mayor of Hebi City. His career path, moving from a local administrative role to the bank's top position, marks an expansion of the anti-corruption campaign from internal bank personnel to those entering from local government.
Why just 10 ASX 200 shares?
The bank's financial report for 2025 shows total assets of 1.41 trillion yuan, a 3.6% increase from the previous year. Revenue grew by 2.1% to 26.51 billion yuan, and net profit rose by 3.1% to 3.58 billion yuan. The non-performing loan (NPL) ratio was 1.96%, with a provision coverage ratio of 165.75%.
Despite these growth figures, the bank's asset quality lags behind the industry average for city commercial banks, which is 1.82% for NPLs and 173.4% for provisions. The real estate sector is a major concern, with an NPL ratio of 5.89%, up 1.47 percentage points year-on-year, and an NPL balance of 1.47 billion yuan, a 18% increase. The bank has also been aggressively disposing of bad assets, offering nearly 25 billion yuan in NPL packages for sale in June 2026.
The bank's current struggles are largely a legacy of its aggressive expansion strategy. Formed in 2014 through the merger of 13 city commercial banks, it further absorbed three other banks in 2022 to push its assets past the trillion-yuan mark. However, these merged entities had high exposure to real estate, and the resulting NPLs are now materializing.
Compliance issues have also been persistent, with the bank receiving dozens of regulatory fines totaling over 10 million yuan since 2024, primarily for inadequate pre-loan vetting and post-loan management. This, combined with the collapse of its senior leadership, paints a picture of an institution where scale was achieved but governance was not.
The three chairmen, despite their different backgrounds, have all been implicated for similar offenses, including illegal lending and accepting bribes related to loans and projects. This suggests that the problem lies not with individual character but with a governance structure that failed to provide adequate checks and balances on the top leadership.
Guo Hao's tenure coincided with the difficult integration period following the bank's major acquisitions. Under pressure to manage the merger, mitigate rising property risks, and meet provincial government performance targets, the chairman's discretionary power likely increased, making the position vulnerable to corruption.
Why just 10 ASX 200 shares?
Guo Hao's removal as a provincial deputy is not a final verdict on his case, which awaits an official announcement from the disciplinary commission. However, the collective evidence of three former chairmen, multiple senior executives, a high NPL ratio in the property sector, and a massive bad asset sale paints a complete picture of ZYBANK's systemic issues.
The bank's story serves as an extreme case of the model adopted by many city commercial banks over the past decade: pursuing scale through mergers, operating under provincial financial holding groups, and intertwining personnel with government roles. The result was growth in assets, but a failure to build a robust governance structure. When the real estate cycle turned and the anti-corruption campaign intensified, the accumulated problems came to the fore.
For Henan Province, a new chairman, Zhou Feng, and a new president, Zhang Tao, have taken over since April 2026. However, the price paid for ZYBANK's lessons includes three former chairs, an 18-year prison sentence for one, and a trillion-yuan balance sheet burdened by bad real estate loans and unresolved factional disputes. This is a cautionary tale for other provincial city commercial banks considering a similar path.
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