China Development Bank, the state-owned lender that owns 3 per cent of Barclays Bank of the UK, extended billions of renminbi in illegal and irregular loans last year, according to a report issued by China's state auditor.

The audit is the latest scandal to hit CDBafter the arrest of vice-chairman Wang Yi in June and his continued detention as part of a probe into alleged corruption. There has also been strong domestic criticism over its investment in Barclays, which is worth roughly half what CDB paid for it last year.