Bank of China New Zealand has revealed a $19.6 million provision for impairment losses, understood to be linked to a loan to stricken insurance company CBL Corp.

The bank did not identify the borrower in its latest disclosure statement but CBL's administrators have reported that the bank has applied to put CBL into liquidation with a court hearing expected in May.

Bank of China does say the $32.8m loan is complex and recovery uncertain.

"The information surrounding the financial condition of the borrower and recoverability of the loan is complex in nature and limited in availability," Bank of China (NZ) said in its disclosure statement for the year to December 31, 2018.

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The level of provisioning has increased from $12m as at December 2017.

"Judgment and estimation are required in determining the amount of the provision for impairment loss. The provision for impairment loss on the loan reflects management's best estimate of the expected credit loss and the amount recovered may be more or less than the provision recognized at 31 December 2018.

"However there is a high degree of judgment and uncertainty in the provision and the loss ultimately suffered by the bank may be significantly greater or less than the amount provided."

Auditor EY noted the issue under an "emphasis of matter" without modifying its opinion on the bank's accounts.

CBL has been in voluntary administration since February last year after the Reserve Bank sought an interim liquidation of its New Zealand supervised arm. Liquidators for subsidiary company, CBL Insurance, have identified a potential shortfall of up to $343m.

CBL Corp – an NZX listed company - itself owes almost $172.8m to creditors, including Bank of China and the Industrial and Commercial Bank of China.

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Bank of China (NZ), whose directors include former cabinet ministers Ruth Richardson and Chris Tremain, reported a net profit of $7.04m in the year to December 31, compared to a $693,000 loss the previous financial year.

Net interest income rose from $15.88m to $30.5m while total assets increased from $1.66 billion to $2.14b.

The bank's loan book now totals $1.75b, the majority of which is concentrated to personal lending in New Zealand.

Its next biggest exposure is rental, hiring and real estate services ($300m), manufacturing ($198.5m) and construction ($150m).

Bank of China (NZ) was granted a licence by the Reserve Bank to operate here in 2014. Back then its main clients were COSCO, Bright Dairy, Huawei and Haier Group, which all do business in New Zealand.