China Minsheng Banking Corp said it has notified police that the head of one of its branches is suspected of illegal conduct - a statement which follows local media reports of missing money from wealth management products.

Police are investigating Zhang Ying, president of the Hangtianqiao branch in Beijing, Minsheng said in a stock exchange filing late on Tuesday.

Business magazine Yicai, citing unidentified sources, said on Tuesday that Zhang was being investigated in connection with 3 billion yuan ($435 million) missing from Minsheng's wealth management products.

Aggressive expansion by mid-sized Chinese banks, particularly into wealth management, and whether sufficient compliance standards are being used has been an area of concern for investors.

Minsheng said it has set up a working group to assist police, adding that "the amount involved as reported by media" was still being investigated. It did not give Zhang's whereabouts.

A spokesman for the lender declined to comment or provide contact details for Zhang.

Re-disseminated by The Asian Banker from Reuters