China's top anti-corruption watchdog said on Friday that it was investigating Tian Huiyu, the former president of China Merchants Bank (CMB) who was removed from his post this week, for a suspected "serious violation of the party's discipline and law".
A brief notice was posted on the website of the National Supervisory Commission, the country's highest anti-corruption agency that oversees party members and civil servants. Created in 2018 as part of Beijing's efforts to bring the governance system closer to the Communist Party, the commission ranks alongside the central government and above the judiciary.
"Tian is currently undergoing the commission's disciplinary review, monitoring and investigations," it said, without giving further details.
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Friday's revelation comes just four days after members of the board of Shenzhen-based CMB - viewed as one of the most successful retail banks in China - voted in favour of his removal on Monday with immediate effect. The bank, which has not revealed the reasons behind his removal, said earlier that Tian would be assigned to another post.
Tian Huiyu, the former president of China Merchants Bank. Photo: Weibo alt=Tian Huiyu, the former president of China Merchants Bank. Photo: Weibo>
Wang Liang, 56, an economist who is the bank's chief financial officer as well as its first executive vice-president, will takeover as interim CEO.
The unexpected news led to the worst sell-off in CMB shares in over a decade, on both the Hong Kong and Shanghai bourses, where its shares are traded, shaving US$35 billion in market capitalisation over two trading days this week.
But analysts generally remained confident that the bank's performance and outlook would not be affected by the incident and the change in management.
"China Merchants Bank has a good management structure and high standards of corporate governance," Richard Cao, an analyst at Guotai Junan Securities, said in a research note issued on Tuesday. "We do not think that this incident will have a material impact on the company."
Leveraging its retail banking-focused strategy, the bank has successfully acquired a large number of customers who seek its wealth management products, Li Shuang, an analyst with Essence Securities, said in a research note this week.
On Friday, China Merchants Bank reported its first-quarter results, which showed that its net profit rose 12.5 per cent to 36 billion yuan (US$5.5 billion), from 32 billion yuan in the same period a year ago. Its non-performing ratio stood at 0.94 per cent, almost flat, as of the end of 2021.
"Amid an increase in frequency of pandemic outbreaks in China, economic development is facing triple pressures of shrinking demand, disrupted supply and weakening expectations," the bank said in a report on its first-quarter results.
Cao at Guotai Junan, however, said he expected the bank's net profit to grow at a "relatively fast pace" for the full year, with its earnings per share growing by 13.9 per cent for 2022 from the 4.61 yuan reported last year.
CMB shares closed at HK$52.05 on Friday, up 2.6 per cent. For the week, however, the stock was down 13 per cent.
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