Sep 23, 2021

(Yicai Global) Sept. 23 -- In the face of investor inquiries a number of Chinese lenders such as Industrial Bank and China Everbright Bank have publicly stated that the current loan risks involving debt-laden property developer China Evergrande Group are manageable. Six listed lenders -- Industrial Bank, China Everbright Bank, Bank of Jiangsu, Jiangsu Changshu Rural Commercial Bank, Wuxi Rural Commercial Bank, and China Zheshang Bank -- responded to questions about loans to Evergrande on investor platforms yesterday. In Evergrande’s 2020 annual report, 20 banks, including China Minsheng Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, and Agricultural Development Bank of China, are listed as the Shenzhen-based real estate developer’s main correspondent banks. Industrial Bank said that it has been strictly monitoring its credit business with Evergrande, and has only been involved in the financing of a small number of real estate development projects with good qualifications in first- and second-tier cities. The bank has sufficient collateral and pledge in existing businesses, without being involved in non-real estate sectors. China Everbright Bank noted that the current credit exposure of large companies in the bank are relatively controllable and will not have a substantial impact on its asset quality trend. China Zheshang Bank revealed that it has granted CNY3.8 billion (USD590 million) in credit to Evergrande, with sufficient collateral and pledge, and the overall risk is manageable. In the event of a risk situation, the bank will adopt risk control measures actively, and it will not have a significant impact on the bank’s business management and asset quality, it added. Bank of Jiangsu said its business with Evergrande is on a small scale, taking up a low proportion, with sufficient collateral and no risk exposure. Jiangsu Changshu Rural Commercial Bank said that as the end of August, it had one loan guaranteed with land to an Evergrande-controlled firm, with a loan balance of CNY3.91 million (USD605,268). Wuxi Rural Commercial Bank said it has no credit business with Evergrande. In addition, Shanghai Pudong Development Bank and Bank of Shanghai also responded to Evergrande’s problems at investor events on Sept. 17. SPDB said it has a small-scale business with Evergrande, with controllable risks. Bank of Shanghai, meanwhile, said that its cooperation with Evergrande is normal with relatively sufficient collateral. It will pay close attention to business operations and strengthen risk prevention and control. Earlier in July, China Minsheng Bank said that its credit businesses with Evergrande are mainly based on pledge and guarantees, which are sufficient and effective. Editor: Peter Thomas