China’s Antigraft Watchdog investigates former CEO of China Merchants Bank

China’s anti-corruption watchdog said it had placed the former president and CEO of China Merchants Bank Co.

during an investigation, a few days after he was suddenly removed from the helm of the state-subsidized lender.

The country’s Central Commission for Discipline Inspection said in a brief statement Friday that Tian Huiyu is “suspected of seriously violating discipline and laws,” without giving details.

Sir. Tian, ​​56, has been president of China Merchants Bank for more than eight years. The Shenzhen headquarters bank’s board voted earlier this week to remove Mr Tian from his position in the company “subject to further allocation”, according to a regulatory application on Monday. It said CFO Wang Liang would oversee the business instead.

On Friday night, the bank noted that Mr Tian is being investigated, adding that its operations are normal.

The company also announced its first-quarter result, which reported a 13% year-on-year increase in net profit to 36 billion yuan ($ 5.6 billion). However, about 2.57% of the bank’s loans to the real estate development industry were in default at the end of March, up from 1.39% in December.

China Merchants Bank, whose parent company is the state-owned conglomerate China Merchants Group, mainly provides retail and commercial banking services in the domestic market. The bank was founded in 1987, has close to 2,000 branches across China and is one of its largest credit card issuers.

Under Mr Tian’s leadership, China Merchants Bank increased its consumer lending activities and sales of asset management products, and its assets more than doubled to the equivalent of $ 1.46 trillion at the end of March – placing it among China’s 10 largest banks by measuring .

Loans granted to individual borrowers have more than tripled, while fees and commissions from the bank’s asset management business have grown significantly.

Chinese President Xi Jinping has launched a round of inspections at 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 Wall Street Journal previously reported. The focus of these inspections is whether these state-owned institutions have come too close to private companies.

Earlier this month, the antigraft watchdog said it had launched an investigation into a former president of the Shenzhen branch of China Construction Bank Corp.

one of the largest state-owned banks in the country.

Prior to joining China Merchants Bank, Mr. Tian worked for China Construction Bank for more than six years, serving in various top positions in the lender’s branches in Shenzhen and Shanghai and as head of its retail banking segment. He has also worked for China Cinda Asset Management,

one of the four major bad debt managers in China. He is also an economist and holds a master’s degree in public administration from Columbia University. Sir. Tian could not be reached for comment Friday.

Shares of China Merchants Bank, which are listed in Hong Kong and Shanghai, fell 12.9% and 9.2% respectively this week. The bank is China’s third largest by market value, after the Industrial & Commercial Bank of China Ltd.

and China Construction Bank.

Write to Rebecca Feng at rebecca.feng@wsj.com and Clarence Leong at clarence.leong@wsj.com

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