People walk past a branch of Ping An Bank, a subsidiary of Ping An Insurance, in Beijing.
BEIJING Reuters - China's Ping An Bank Co Ltd said its overdue and special-mention loans increased in the third quarter mainly due to a liquidity crunch at Shenzhen Baoneng, a property and financial services conglomerate.
Ping An Bank's outstanding special-mention loans - debts that could potentially turn sour - rose by 37.3% in the third quarter from the end of 2020, while outstanding loans and interests overdue within 90 days increased 32.5%, according to the bank's earnings report released on Wednesday.
A major client, Baoneng, has led to the increases of the indicators of special-mention and overdue loans Guo Shibang, Vice President of Ping An Bank, told investors and journalists on Thursday.
The bank had been aware of the risks of Baoneng from the beginning of the year and had made provisions to prepare for any default of the loans, which have enough collateral of properties in Shenzhen and Hangzhou, Guo added.
The ultimate risk of Baoneng would be good and the quality of the bank's loans in the property sector overall is still controllable, he said.
Baoneng was famous for launching a highly leveraged takeover bid in 2015 for what was then the biggest publicly traded developer, China Vanke Co Ltd. The attempt failed after Baoneng became Venke's biggest shareholder, diluting the holdings of Shenzhen Metro.
Guo also said that HNA Group could collect back all the principal and part of the interest of the loans to Ping An Bank under its current restructuring plan.