Greater China Banks Daily: NAO highlights policy execution and compliance gaps at major banks; NAO flags non-compliant LGFV exits and new implicit debt

Research evidence excerpt

Greater China Banks Daily: NAO highlights policy execution and compliance gaps at major banks; NAO flags non-compliant LGFV exits and new implicit debt

Global Research

25 June 2026ab

Greater China Banks Daily Equities

ChinaNAO highlights policy execution and compliance

gaps at major banks; NAO flags non-compliant Banks

LGFV exits and new implicit debt MayAnalystYan

may.yan@ubs.com

+852-2971 7157

NAO highlights policy execution and compliance gaps at major banks Alex Ye

Analyst

STCN, Jun 24: On June 23rd, the National Audit Office released an annual report S1460522090005

identifying areas where several major financial institutions could strengthen policy alex.ye@ubs.com

implementation, internal controls and compliance management. (i) For CCB, ICBC, +86 755 2215 8858

BOCOM and CITIC, the audit found that some technology-finance lending practices did

Catherine Yang, CFA

not fully align with policy objectives. Loans of Rmb64.22bn did not use the innovation Analyst

points of tech companies as a measure for evaluating their loan capacity, while another S1460526010003

Rmb 5.44bn failed to support the mergers of tech firms. 21% of the so-called IP- catherine-za.yang@ubs.com

collateral loans, which was designed as a facility to provide collateral exemptions for +86-755-2215 8860

tech companies, either demanded traditional collaterals from loan takers or are issued to Helen Li, CFA

firms with good credit that already qualify for zero-collateral conditions. There are also Analyst

20% of technology branches of these banks missing the technology features required. helen-za.li@ubs.com

(ii) For ABC, Everbright Group and BOC, the report identified a number of conduct- +852-2971 6066

related issues. For instance, ABC issued Rmb11.07bn in loans to underqualified