(Yicai Global) Dec. 28 — China Huarong Asset Management is selling the 70 percent equity it holds in its consumer finance arm to the Bank of Ningbo for CNY1.09 billion (USD171 million) as the Chinese distressed debt manager struggles to pay off its own debts.

The Bank of Ningbo is buying a controlling stake in Huarong Consumer Finance, China Huarong said in a filing to the Hong Kong Stock Exchange yesterday. Other stakeholders are Hefei Department Store Group, Shenzhen Huaqiang Asset Management Group and Anhui Xin’an Asset Operation Management with 15.33 percent, 8 percent and 6.67 percent equity respectively.

The purchase will further extend the reach of the Bank of Ningbo in the lucrative credit lending field, market analysts said. As of the end of June, the Ningbo, southeastern Zhejiang province-based lender had issued CNY198.4 billion (USD31.1 billion) worth of consumer loans, a year-on-year gain of 11 percent, according to its semi-annual earnings report.

Huarong Consumer Finance raked in profit of CNY5.5 million (USD873,676) in the first half on revenue of CNY637 million. It had assets of CNY7.5 billion (USD1.2 billion) as of the end of June, with liabilities of CNY6.7 billion.

China Huarong is also selling stakes in other subsidiaries, including Huarong Securities, Huarong Xiangjiang Bank, China Huarong Financial Leasing, Huarong Rongda Futures and Huarong Jinshang Asset Management, as it attempts to clear debts of CNY103 billion (USD16 billion).

Bank of Ningbo’s share price [SHE:002142] closed up 0.75 percent at CNY37.85 (USD6) today.

Editors: Liao Shumin, Kim Taylor