Ailing payday lender Peoples Exchange Bank (PEB) has filed for Chapter 11 bankruptcy protection after losing almost $10.4 billion to a Chinese firm.
The lender, whose operations in China and Hong Kong were once one of the most successful in the world, had been owned by a Chinese company since 2011.
But the company in June 2018 filed for bankruptcy protection, citing mounting debt.
“The company is now in financial difficulties,” said Wang Jijun, a former PEB director who now runs a consultancy for China.
“There are no good assets to replace.
The company is bankrupt.”
The company was one of several to go bust in recent years, but the latest chapter was the biggest in terms of assets.
In 2017, PEB had assets of $1.6 billion and liabilities of $8.7 billion.
The Chinese firm, Wudong Securities, filed for creditor protection in the state-run People’s Bank of China (PBOC), citing debt and rising interest rates.
The bank did not provide details about the reasons behind the filing.
Peoples Exchange Bank was one a number of Chinese lenders that were left with more than $30 billion in liabilities after being hit by the market’s worst credit crisis since the 2008-2009 financial crisis.
The company said in 2018 it would seek repayment of loans made by customers and other creditors to repay the debt.
“We are taking steps to recover the funds that we owe and will continue to repay our customers,” said a spokesman for the bank.
The lender’s total debt is about $3.8 billion.