ICBC’s Zheng poised to lead Minsheng Bank

Zheng Wanchun, vice president of ICBC, is set to take the helm of China Minsheng Bank, the country’s largest private lender by assets.

Zheng Wanchun, vice president of Industrial & Commercial Bank of China, the world’s largest lender by assets, is set to become the president of privately held China Minsheng Bank, sources familiar with the matter told FinanceAsia.

Zheng’s appointment has not been finalised and is pending approval from the banking regulator, according to sources at Minsheng, who spoke on the condition of anonymity.

“Almost everyone at Minsheng Bank knows Zheng is joining as president," said one of the sources at Minsheng, the country's largest private lender by assets. "It just takes some time to go through the formalities.”

Both ICBC and Minsheng declined to comment on the issue.

“We are a listed bank," a public relations representative at Minsheng told FinanceAsia. "We will issue timely announcements on major events like this [if they occur].”

Zheng could not be immediately reached for comment.

Predecessor's plight

Minsheng’s former president Mao Xiaofeng stepped down in late January “for personal reasons”, the bank said in a stock exchange filing at the time.

Mainland media however reported Mao was being investigated by anti-corruption authorities at the time of his departure, making him the highest-level banking official ensnared in President Xi Jinping’s crackdown on corruption.

Caixin, a well-regarded Chinese financial magazine, reported Mao was detained to assist in a corruption investigation into Ling Jihua, the top aide to former Chinese President Hu Jintao, Xi's predecessor.

Last month, Ling was stripped of his Communist party membership and will face trial on corruption charges, the official Xinhua News Agency reported.

Minsheng has not filled the post vacated by Mao. The bank's board chairman Hong Qi has stepped in to serve as acting president.

Hard times

Established in Beijing in 1996, Minsheng was the first private bank to open in China since the Communists came to power. It is listed on the Shanghai and Hong Kong stock exchanges. The bank's strength is in financing small- and medium- sized companies.

Late last year, Anbang Insurance Group, a mainland insurer controlled by the grandson-by-marriage of former Paramount Leader Deng Xiaoping, became Minsheng’s largest shareholder, replacing the Sichuan-based agricultural conglomerate New Hope Group.

Anbang paid approximately Rmb38 billion for more than 20% of Minsheng through a series of secondary deals, according to filings with the Hong Kong stock exchange.

Anbang sought to control Minsheng because it is “the only listed bank (in China) that does not have a controlling shareholder,” Caixin reported at the time, citing analysts at Guotai Junan, a mainland brokerage.

Minsheng has not fared well amid China’s economic rebalance. Interest rate cuts and a decrease in borrowing from the flagging property sector have further dented performance. Last year, the bank's net profit growth slowed by 5.53% to Rmb 44.5 billion ($7.16 billion) -- the first time the lender recorded single-digit net profit growth since listing in Shanghai in 2000, according to data provider Wind Information. 

Moreover, its bad-loan ratio rose to 1.22% as of the end of March, up from 1.17% last year, according to its first quarter report. Total bad loans stood at Rmb21.1 billion as of last year, up 58% from a year earlier, according to the bank's 2014 annual report.

Market insiders say Zheng is taking the helm at Minsheng at a challenging time.

“ICBC and Minsheng have completely different business models," said another Minsheng source. "One [bank] focuses on big SOEs and government institutions while the other focuses on SMEs. We’re concerned if he [Zheng] will be a good fit for us.”

Steady rise

Zheng, 51, a senior economist and capital market veteran, however, has an impressive track record.

He first joined ICBC in 1991, starting at the Hainan branch then rising steadily up the ranks to become head of the bank's industrial and commercial credit department, according to his profile on the ICBC website.

In 1999, he joined newly established China Huarong Asset Management, a firm destined to become the country’s largest distressed debt manager, rising to the office of vice president in 2004.

He joined China Great Wall Asset Management, another big Chinese bad loans manager, in 2011 as president and stayed in the post unti 2013 when he returned to ICBC as a vice president.

Zheng graduated from Renmin University and obtained a doctorate in economics.

The career banker has a wealth of experience managing bank lending and state-owned assets, said the ICBC source. 

Since becoming vice president at ICBC his remit has covered corporate and investment banking.

“His ability has been widely recognized here,” a Beijing-based banker at ICBC told FinanceAsia. “I don’t understand why Minsheng people are concerned.”

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