Zhao Huan, president of Agricultural Bank of China (ABC), has been appointed chairman of China Development Bank (CDB) as the policy bank leverages on his extensive experience in handling non-performing loans to manage the soaring assets on its balance sheet.
Zhao’s appointment was confirmed after ABC said on Tuesday he would step down from his role as president and vice-chairman with immediate effect. The appointment is subject to approval from the China Banking Regulatory Commission.
Zhao will become the fourth chairman of CDB since the lender was founded in 1994 to support the country’s infrastructure development. He will succeed Hu Huaibang, who had been chairman of CDB since April 2013.
The immediate challenge facing the former ABC president is to manage CDB’s bloating assets and the increasing risks behind them.
CDB is the world's largest development finance institution with total assets of Rmb16 trillion ($2.3 trillion) – more than those of the World Bank and the Asian Development Bank combined – while its outstanding loans topped Rmb1.1 trillion.
Having invested more than $110 billion over the last five years, the policy lender is a major financing vehicle for projects under China's Belt and Road initiative.
However, it is facing mounting risks on its assets due to its large exposure on infrastructure projects, some of which may run into problems as China’s economic growth slows.
Zhao has proven his ability to tackle bad debt since he became president of ABC in January 2016. Since then, the country’s third-largest lender by asset size recovered bad loans of over Rmb360 billion as of the end of June this year, the most among China’s “Big Four” banks.
Zhao, 56, was chairman of China Everbright Bank between 2014 and 2016 before joining ABC. He was vice chairman of China Construction Bank between 2011 and 2014.
