China’s anti-corruption watchdog said it has placed the former president and chief executive of China Merchants Bank Co. under an investigation, just days after he was abruptly removed from the helm of the state-backed lender.
The country’s Central Commission for Discipline Inspection said in a brief statement on Friday that Tian Huiyu is “suspected of seriously violating discipline and laws,” without providing details.
Mr. Tian, 56 years old, was China Merchants Bank’s president for more than eight years. The Shenzhen-headquartered bank’s board of directors earlier this week voted to remove Mr. Tian from his position at the company “subject to further assignment,” according to a regulatory filing on Monday. It said chief financial officer Wang Liang would instead oversee the business. The bank noted that Mr. Tian is being investigated, adding that its operations are normal.
The company also released its first-quarter results, reporting a 13% year-over-year increase in net profit to 36 billion yuan ($5.6 billion). However, some 2.57% of the bank’s loans to the property-development industry were nonperforming at the end of March, up from 1.39% in December.
China Merchants Bank, whose parent is state-owned conglomerate China Merchants Group, mainly provides retail and corporate banking services domestically. The bank was founded in 1987, has close to 2,000 branches across China, and is one of its biggest credit-card issuers.
Under Mr. Tian’s leadership, China Merchants Bank ramped up its consumer lending activities and sales of wealth-management products, and its assets more than doubled to the equivalent of $1.46 trillion by the end of March—placing it among China’s 10 largest banks by that measure.
Loans extended to individual borrowers more than tripled, while fees and commissions from the bank’s wealth-management business have grown significantly.
Chinese President Xi Jinping has launched a round of inspections into some of the country’s largest state-owned financial institutions. The inspections, announced in September, target state-owned banks, investment funds and financial regulators. The focus of these inspections is whether these state-owned institutions have become too close to private firms.
Earlier this month, the antigraft watchdog said it had started an investigation of a former president of the Shenzhen branch of China Construction Bank Corp, one of the largest state-owned banks in the country.
Before Mr. Tian joined China Merchants Bank, he worked at China Construction Bank for more than six years, serving in various top posts in the lender’s Shenzhen and Shanghai branches, and as an executive of its retail banking segment. He has also worked for China Cinda Asset Management, one of the big four bad-debt managers in China.
Shares of China Merchants Bank, which are listed in Hong Kong and Shanghai, fell 12.9% and 9.2%, respectively, this week.
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