Analysis of Huishang Bank's RMB 8.15 Million Fine Incident and Internal Control System Failure

Based on authoritative reports and data retrieved, I will conduct a systematic and comprehensive analysis for you.

---

According to administrative penalty information disclosed by the Anhui Regulatory Bureau of the State Administration of Financial Regulation in December 2025, Huishang Bank received two huge fines on the same day, with a total penalty amount of

[1][2]:

Fine Amount	Major Illegal and Irregular Acts	Accountability
RMB 1.5 million	Irregular loan issuance, inadequate post-loan management, inadequate credit card business management, imprudent wealth management business	Two responsible persons were warned and fined a total of RMB 100,000
RMB 6.65 million	Inadequate management of financial advisory business, non-compliance with cross-regional business	Two responsible persons were warned and fined a total of RMB 110,000

Notably, this is not an isolated incident.

, showing a clear vicious cycle of “violation - penalty - rectification - re-violation”[1][3].

---

Sorting through Huishang Bank’s penalty records in 2025, the issue of “inadequate implementation of the three loan checks” shows characteristics of high concentration and recurrence:

• October 2025
  : Fined
  RMB 2.4 million
  for “imprudent management of loan products and inadequate implementation of the three loan checks”; the responsible person Wang was
  banned from engaging in banking work for 10 years
  [2][3]
• September 2025
  : Chuzhou Branch was fined
  RMB 400,000
  for “failure to fulfill duties in the three loan checks”[4]
• July 2025
  : Bozhou Branch and Chuzhou Branch were penalized for issues including “issuing loans without the actual arrival of project capital”[4]
• Grassroots Branches
  : Hefei Baohe Industrial Park Sub-branch was fined RMB 300,000 for inadequate pre-loan investigation; for inadequate pre-loan and post-loan management at Hefei Ningguo Road Sub-branch, the responsible person Tang was
  permanently banned from the industry
  [2][3]

From the perspective of violation type distribution, Huishang Bank’s issues have covered every link in the full process of credit business[1][3][4]:

• Pre-loan Stage
  : Inadequate pre-loan investigation, imprudent investigation
• Mid-loan Stage
  : Imprudent management of loan products, irregular loan issuance
• Post-loan Stage
  : Inadequate post-loan management, lack of monitoring

This phenomenon of “full-process breakdown” indicates that the problem is not accidental, but a concentrated manifestation of systemic defects.

---

Wang Pengbo, Chief Analyst of Botong Consulting, pointed out that two core problems in Huishang Bank’s internal management can be directly seen from the content of its fines[3]:

First, failure of the risk control system

. There are obvious loopholes in internal verification, and the inspection of the entire credit process is a mere formality, failing to form effective constraints at the institutional level, leading to repeated issues such as dereliction of duty in pre-loan investigation and lack of post-loan monitoring.

Second, lack of personnel management

. Supervision over the process compliance of credit personnel is insufficient, and individual performance of duties is not deeply bound to risk responsibilities, resulting in “violation costs being lower than violation benefits”, which indirectly condones extensive credit operations.

Analysis from Manager Online points out that the essential dilemma faced by Huishang Bank is the result of

[4]:

Risk Dimension	Specific Performance
Top-level Governance Vacuum	After Chairman Yan Chen resigned due to job transfer in July 2025, the chairman position remained vacant for 5 months without replacement , lacking a unified and authoritative decision-making core[1][4]
Inertia of Senior Management Corruption	Among the 5 chairmen since the restructuring, the first chairman Dai Hedi, the third chairman Li Hongming, and the fourth chairman Wu Xuemin were all investigated and punished for corruption . The demonstration effect of senior management has reduced compliance concepts to mere formality[4]
Institutional Futility	Regulatory notices directly stated that “there is a lack of compliance culture, and some branches have formed a pattern of irregular operations”[4]

Notably, internal control failure is not unique to Huishang Bank. In December 2025,

was fined RMB 8.9 million for “inadequate internal control management and serious failure to fulfill duties in the three checks of pre-loan, mid-loan and post-loan processes”, and the then chairman was permanently banned from the industry[5][6]. Such cases reflect that [3].

---

Huishang Bank’s development trajectory shows an

of “pursuing scale first, then remedying after risks are exposed”[4]:

• Total assets expanded from RMB 1.38 trillion at the end of 2021 to
  RMB 2 trillion
  at the end of 2024, and further reached
  RMB 2.3 trillion
  by the end of September 2025[1]
• However, net interest income, the core profit source,
  declined for the first time
  : in the first half of 2025, it was RMB 14.53 billion,
  a year-on-year decrease of RMB 156 million
  [4]
• Non-performing real estate loans soared from RMB 398 million at the end of 2024 to
  RMB 1.156 billion
  at the end of June 2025, an increase of
  190%
  [4]

Indicator	End of 2024	End of June 2025	Change
Overall Non-performing Loan Ratio	-	0.98%	Slight decrease
Non-performing Real Estate Loans	RMB 398 million	RMB 1.156 billion	+190%
Non-performing Loan Ratio of Real Estate Sector	-	3.12%	2.14 percentage points higher than the overall ratio
Non-performing Personal Loan Ratio	1.51%	1.52%	+0.01%

Data Source: Huishang Bank 2025 Interim Report[4]

These data indicate that while the scale is expanding, risks are accumulating covertly, and internal control failure makes it difficult to identify and resolve risks in a timely manner.

---

. This judgment is based on the following evidence:

1. Recurrence of Issues
   : The same type of violation occurred multiple times within the year, indicating that rectification was a mere formality
2. Full-Process Breakdown
   : Obvious loopholes exist in pre-loan, mid-loan, and post-loan links
3. Governance Structure Flaws
   : The long-term vacancy of the chairman and the inertia of senior management corruption have led to a lack of compliance culture
4. Corroboration from Common Industry Issues
   : Similar problems have repeated in multiple small and medium-sized banks, confirming the existence of systemic defects

Aspect	Recommended Measures
Governance Level	Appoint a chairman as soon as possible, and strengthen the checks and balances mechanism of “three committees and one tier”
Institutional Level	Improve regulatory requirements for the full credit process, clarify inspection standards and accountability mechanisms for each link
Technical Level	Promote the construction of digital risk control to achieve real-time monitoring of pre-loan, mid-loan, and post-loan processes
Personnel Level	Strictly implement the “double penalty system”, strengthen the binding of individual responsibilities and interests, and form an effective deterrent

---

[1] Sohu Finance - “Trillion-Yuan Huishang Bank’s ‘Push’ for A-Share Listing: Assets Surge, Three Major Issues to Be Resolved” (https://m.sohu.com/a/972849180_120022955)

[2] Sina Finance - “Huishang Bank Fined a Total of RMB 2.7 Million: Imprudent Management of Loan Products, etc.” (https://finance.sina.com.cn/jryx/fd/2025-10-26/doc-infvfitq0769776.shtml)

[3] China Times - “Fined Repeatedly, Huishang Bank Suspected of Risk Control Failing to Keep Up with Business” (https://finance.sina.com.cn/roll/2025-10-30/doc-infvrnxr2649499.shtml)

[4] Manager Online - “Huishang Bank Trapped in the Quagmire of Compliance” (https://news.qq.com/rain/a/20251209A06USZ00)

[5] Beijing Business Daily - “Another Wake-Up Call for Compliance Operations of Local City Commercial Banks” (https://xinwen.bjd.com.cn/content/s693ee361e4b0377c883aa661.html)

[6] Sina Finance - “Chongqing Three Gorges Bank Fined Another RMB 8.9 Million, Then Chairman Permanently Banned from the Industry” (https://finance.sina.com.cn/roll/2025-12-18/doc-inhcfvkx7965348.shtml)