China's Baoshang Bank to be taken over by local governments, state firms

BEIJING (Reuters) – China’s troubled Baoshang Bank will be taken over by local governments and a group of state firms, a central bank official with direct knowledge of the matter said, as Beijing looks to shore up some of the country’s weakest lenders.

The governments of China’s Inner Mongolia Autonomous Region and the region’s city of Baotou will lead the acquisition of at least a 50% stake in a reorganized Baoshang Bank, according to the official, who declined to be identified given the sensitivity of the matter. State firms in Inner Mongolia will also participate in the takeover, the official said.

Other strategic investors in the revamped Baoshang Bank include Huishang Bank (HK:), China Construction Bank (CCB) (HK:) (SS:) and a national deposit insurance fund managed by the central bank, the official said.

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