Minsheng Bank's Shenzhen branch recently auctioned off three debt packages, including one from Evergrande, for approximately 319 million yuan—a staggering 86% discount from the total debt value of nearly 2.36 billion yuan. The Evergrande-related debt alone accounted for about 2.359 billion yuan.
Minsheng Bank and Evergrande established a strategic partnership in 2015. According to Evergrande’s 2020 annual report, Minsheng Bank ranked first among Evergrande’s top 20 banking partners. By the end of 2024, Evergrande’s outstanding loans with Minsheng Bank stood at 9.1 billion yuan, all tied to real estate projects.
Beyond Evergrande, Minsheng Bank has collaborated with multiple property developers. As early as 2008, the bank established a real estate finance division. A former vice president once stated, "Minsheng Bank will continue to support the transformation and upgrading of the real estate industry and its clients, serving as a long-term investor in the sector."
Notably, in 2024, two senior executives from Minsheng Bank’s former Shenzhen real estate finance division were reportedly under investigation. Sources suggest the probes were linked to Baoneng Group, though not exclusively. Recent listings on Alibaba’s judicial auction platform showed 18 foreclosed properties linked to one of the investigated individuals.
**An 86% Discount on Evergrande Debt** On December 10, JD.com’s auction platform revealed that Minsheng Bank sold three debt packages, including Evergrande’s, for 319 million yuan—just 14% of the 2.36 billion yuan total. The Evergrande portion alone was valued at 2.359 billion yuan, while the other two borrowers’ debts were minimal (397,900 yuan and 186,700 yuan, respectively).
Minsheng Bank’s ties with Evergrande date back to 2015, when the two signed a 30-billion-yuan credit agreement covering real estate development and community services. By 2024, Evergrande’s loans with Minsheng Bank had ballooned to 9.1 billion yuan.
**Deep Roots in Real Estate** Founded in 1996, Minsheng Bank was China’s first privately initiated national joint-stock commercial bank. Its early major shareholders, including New Hope, Oceanwide Holdings, and Orient Group, all had real estate interests. In 2008, the bank launched its real estate finance division, later expanding collaborations with developers like Evergrande.
However, recent years have seen turbulence. In 2024, two Shenzhen-based executives—Hu Zhenyu and Jin Li—were investigated, reportedly over kickbacks linked to loans, including those involving Baoneng. In December, 18 foreclosed properties tied to Hu were auctioned, with proceeds earmarked for victim compensation.
**Exposure to Real Estate Risks** As China’s property sector faltered, Minsheng Bank faced mounting bad loans. By end-2024, its real estate loans totaled 333.439 billion yuan, with non-performing loans (NPLs) hitting 16.698 billion yuan—a 5.01% NPL ratio, far exceeding other sectors.
The bank also suffered from defaults on bonds issued by developers like Huaye Capital, Blu-ray Development, and Sunac. Additionally, major shareholders Oceanwide Holdings and Orient Group faced financial crises, further straining Minsheng Bank’s stability.
By mid-2025, Oceanwide had exited as a shareholder, while Orient Group, despite holding 2.92% of shares, saw most of its stake frozen or sold off. Other top shareholders, including Liye Group and Shanghai Gentech, also reported high pledge ratios, raising concerns over governance risks.
A recent credit rating report highlighted Minsheng Bank’s exposure to unstable shareholding structures and related-party transaction risks, underscoring challenges ahead.
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