An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip/Files
June 24, 2021
HONG KONG (Reuters) – China Minsheng Banking Group said risks from its loan exposure to debt-laden property developer China Evergrande Group is “within controllable range”, with exposure having dropped since last September.
Minsheng, one of the major lenders to Evergrande, made the comment on Wednesday evening in replies to investor questions on Shanghai Stock Exchange’s E Interaction platform.
Questions about Evergrande’s liquidity – it has racked up more than $100 billion in debt – have emerged amid late payment on some of its commercial paper. Credit rating agency Fitch on Tuesday downgraded the company’s long-term debt to B with a negative outlook, citing ongoing pressure to downsize business and reduce total debt.
Regulators have been asking banks to conduct stress tests on Evergrande, whose debt stood at 716.5 billion yuan ($111 billion) at the end of 2020, making it the most indebted developer in the country.
In replies to questions on the investor platform, Minsheng said all repayments from Evergrande and its associates have been normal so far, and its loan exposure to Evergrande has dropped since the developer speeded up property sales in September.
It said the overall risk is controllable because most of its loans to the developer are guaranteed by collateral such as land and properties.
($1 = 6.4770 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Kenneth Maxwell)
