China’s Ping An Bank says its overdue loans rise on Baoneng liquidity crunch

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Folks stroll previous a department of Ping An Financial institution, a subsidiary of Ping An Insurance coverage, in Beijing, China, August 27, 2020. REUTERS/Thomas Peter

BEIJING, Oct 22 (Reuters) – China’s Ping An Financial institution Co Ltd stated its “special-mention” and overdue loans elevated within the third quarter primarily as a result of a liquidity crunch at Shenzhen Baoneng, a property and monetary companies conglomerate.

Ping An Financial institution’s excellent special-mention loans – money owed that would doubtlessly flip bitter – rose by 37.3% within the third quarter from the top of 2020, whereas excellent loans and pursuits overdue inside 90 days elevated 32.5%, in keeping with the financial institution’s earnings report launched on Wednesday.

“A significant consumer, which is Baoneng, has led to the will increase of the symptoms (of special-mention and overdue loans),” Guo Shibang, Vice President of Ping An Financial institution, instructed traders and journalists on Thursday.

The financial institution had been conscious of the dangers of Baoneng from the start of the 12 months and had made provisions to arrange for any default of the loans, which have sufficient collateral of properties in Shenzhen and Hangzhou, Guo added.

The last word danger of Baoneng can be controllable and the standard of the financial institution’s loans within the property sector total remains to be good, he stated.

Baoneng was well-known for launching a hostile, extremely leveraged takeover bid in 2015 for what was then the largest publicly traded developer, China Vanke Co Ltd. The try failed after Shenzhen Metro turned Venke’s largest shareholder, diluting the holdings of Baoneng.

Guo additionally stated Ping An Financial institution might accumulate again all of the principal and a part of the curiosity of the loans to HNA Group beneath its present restructuring plan.

Reporting by Zhang Yan and Ryan Woo; Modifying by Lincoln Feast.


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