HUA XIA BANK(SH:600015) Sou Hu Cai Jing·2025-09-09 09:10Core Viewpoint - Huaxia Bank has been fined 87.25 million yuan for imprudent management of loans, bills, and interbank business, marking the largest penalty in the financial industry for 2025, highlighting significant issues in risk management and data reporting compliance [4][6]. Group 1: Regulatory Penalties - The bank's violations include inadequate management of loan processes, leading to misappropriation of funds and issuance of loans to risky clients to conceal bad assets [5][6]. - From January to September 2025, Huaxia Bank received 17 fines totaling over 99 million yuan for similar issues, indicating a pattern of regulatory non-compliance [6][12]. - The bank acknowledged the penalties and has implemented corrective measures, including optimizing risk control processes and enhancing data governance [6][12]. Group 2: Risk Management Issues - The penalties reflect a lack of effective risk management, with multiple branches cited for failing to conduct thorough loan checks and misclassifying asset risks [7][12]. - The bank's reported restructured loan balance of 9.014 billion yuan raises concerns about potential practices of borrowing to repay old debts, contradicting the ESG report's emphasis on proactive risk identification [8][12]. - The personal loan non-performing rate increased to 2.27%, up 0.47 percentage points year-on-year, indicating potential imbalances in business strategy and risk management [8][12]. Group 3: Data Integrity Concerns - Huaxia Bank has faced scrutiny for data integrity, with instances of manipulating loan risk classification to obscure the true quality of assets [12][13]. - The bank's reported non-performing loan rate of 1.60% remained unchanged from the end of 2024, but the lack of transparency regarding branch-level data manipulation raises questions about the accuracy of reported figures [12][13]. - The bank's ESG report claims to ensure the authenticity of disclosed information, yet the penalties for data reporting violations suggest a significant gap between stated intentions and actual practices [12][13]. Group 4: Internal Control Weaknesses - Internal control issues are prevalent, with multiple branches failing to adhere to established credit management protocols, indicating a disconnect between operational practices and ESG commitments [14][15]. - The bank's compliance culture is under scrutiny, as 21 branches faced penalties within the year, suggesting systemic issues in risk management frameworks [15][16]. - Despite initiatives like "quality improvement year" for due diligence, the lack of fundamental changes in compliance practices raises concerns about the effectiveness of training and accountability measures [16][17].