On June 23, the official website of the Audit Office released the "Audit Work Report on the Implementation of the Central Budget and Other Financial Revenues and Expenditures for the Year 2025," revealing issues found in several audited financial institutions.

Among them, in the second point regarding major risk audit situations related to financial risks, the audit covered three financial enterprises: Agricultural Bank of China, China Everbright Group Co., Ltd., and Bank of China, with the main issues identified including:

Failure to fully leverage their unique advantages. For example, as the main force serving "the three rural issues," the Agricultural Bank of China had lax pre-loan reviews from December 2021 to August 2025, illegally issuing loans of 11.066 billion yuan to non-high-standard farmland projects, with some funds misappropriated for purchasing wealth management products and repaying debts. As a financial holding company, China Everbright Group Co., Ltd. failed to control decision-making rights over some wholly-owned subsidiaries and inadequately managed some directly controlled subsidiaries, with individual subsidiaries abusing the "Everbright" brand.

Improperly profiting from financial preferential policies. For instance, from April 2023 to August 2025, the Bank of China arranged for two subordinate financial institutions to act as channels, by including a large number of employees contributing 1 yuan to 100 yuan as "headcounts," packaging 11 private equity funds as public funds, and evading taxes of 2.367 billion yuan by taking advantage of the public fund's income tax exemption policy.

The author declares: This image was generated by AI△Audit. AI Creative Image

In the second point regarding the audit of state-owned asset management in financial enterprises, the audit focused on two state-owned banks and one financial holding company, identifying the following main issues:

1. Overly pursuing scale expansion, with some performance figures being inflated.

Firstly, through "involution-style" competition, the loan and deposit scale increased by 1.41 trillion yuan. The three financial enterprises inflated 615.67 billion yuan through "first deposit then loan," "immediate loan immediate collection," etc., from 2023 to August 2025; they increased 472.304 billion yuan by aggressively competing for loans at ultra-low interest rates and funding clients to develop information systems in exchange for deposits; and increased 324.127 billion yuan by lowering review standards and relaxing risk control requirements.

Secondly, by using false or preferential methods to increase the bond business scale by 756.959 billion yuan. One financial enterprise inflated cross-border bond trading volume by 389.36 billion yuan through mutual transactions among domestic and overseas branches; it inflated domestic trading volume by 4.488 billion yuan by guiding internal employees and clients to frequently trade "buy and sell immediately." Two financial enterprises, in pursuit of bond underwriting scale or market ranking, sold bonds below the issuance price, incurring a loss of 242 million yuan in exchange for an increase in underwriting scale of 363.111 billion yuan. **

1. There are weak links in risk management and multiple business violations.

First, violations in concealing or disposing of non-performing assets amounting to 63.441 billion yuan. This mainly involves artificially concealing non-performing assets by setting excessively long grace periods without adjusting classifications, lowering original loan interest rates to reduce repayment amounts, and issuing new loans to replace original non-performing assets; violating write-off procedures and principles of competitive selection, through "zero consideration" repurchase of non-performing asset disposal projects, and directing the transfer of non-performing assets to designated local government entities, thereby falsely or illegally disposing of non-performing assets.

Second, violations in conducting credit business amounting to 67.616 billion yuan. For example, one financial enterprise issued personal business loans of 1.517 billion yuan to more than 150 individuals who did not meet qualifications from 2021 to August 2025; issued housing mortgage loans of 2.812 billion yuan to individuals with projects such as uncapped housing and those holding false income certificates; and issued personal consumption loans of 33.078 billion yuan through personal credit for enterprises.

Third, violations in conducting non-credit business. For instance, one financial enterprise sold public funds targeting high-risk assets to low-risk tolerance clients amounting to 2.039 billion yuan from April 2023 to August 2025. A trust company affiliated with one financial enterprise illegally sold trust products amounting to 149.178 billion yuan through a non-financial subsidiary established in violation of regulations from August 2023 to August 2025, and continued to violate rigid redemption of 2.042 billion yuan even after being explicitly halted by regulatory authorities.

Coordinated by / Xinxiang Finance Written by / Xiangcai Plus

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