BEIJING—China’s troubled Baoshang Bank will be taken over by local governments and a group of state firms, a central bank official with direct knowledge of the matter said, as Beijing looks to shore up some of the country’s weakest lenders.
Inner Mongolia-based Baoshang Bank became the first high-profile case of China’s small lender crisis as financial regulators took control of the lender in May last year due to “serious” credit risks, rattling domestic markets and prompting the central bank to inject cash into the banking system to prevent contagion risks.
