On November 2, a financial frontline report said that Minsheng Bank (ASX: 01988) held its 2026 third-quarter results briefing today.
An analyst noted that, based on the bank's profit performance, credit cost remains an important factor affecting profit levels, and asked where the main pressures are currently coming from.
In response, Shi Lei, general manager of Minsheng Bank's (ASX: 600016) credit management department, said that since 2025, under the impact of multiple factors including the external economic environment, the real estate market, and household income expectations, newly generated non-performing loans in the bank's large retail segment have increased year on year, while certain corporate real estate exposures continue to be downgraded to non-performing at a steady proportion each year.
Minsheng Bank has actively responded to the pressure from growth in newly generated non-performing loans and continuously increased disposal efforts, but the non-performing asset market is still in a stage of supply-demand adjustment, cash recovery is relatively difficult, and the loss rate on non-performing disposals has risen somewhat. As a result, the bank's credit cost has increased year on year over the past two years.
He further pointed out that, considering these influencing factors are still continuing, full-year credit costs are expected to face some upward pressure this year. Minsheng Bank will continue to pay close attention to the evolution of internal and external risks, and has already taken measures such as adjusting admission strategies and strengthening quality control to strictly control new risks.
Regarding the generation of new retail risks, he said that overall risk release in Minsheng Bank's large retail business is still continuing, and risk performance among different products has diverged.
First, mortgages and consumer loans. Since last year, Minsheng Bank has proactively adjusted its structure, continued to optimize key placement channels, and orderly exited co-operated internet loans and other risk-reduction measures, with results gradually emerging and newly generated non-performing loans tending to stabilize.
Second, small and micro enterprises are more sensitive to economic cycles and industry fluctuations. As current market demand has not fully recovered and corporate profitability is relatively weak, small and micro loans still carry certain hidden risks, and newly generated non-performing loans have increased year on year.
Third, risk management in the credit card business segment remains under pressure, and newly generated non-performing loans continue to grow year on year.
Facing the form of risk exposure in the large retail business, Minsheng Bank has taken measures such as optimizing retail business admission strategies, building a large retail risk monitoring system, and strengthening tiered and classified management of existing assets to strictly control new risks, while taking multiple measures to increase recovery and disposal efforts for existing non-performing assets.
First, it has increased the intensity of traditional disposal methods, simultaneously carrying out conventional means such as self-recovery, litigation recovery, outsourced recovery, and debt transfer write-offs, choosing disposal methods by tier and category in a differentiated way, and improving the efficiency of coordinated disposal.
Second, it has actively used interbank non-performing asset securitization tools to achieve batch market-based off-balance-sheet removal and reduce the scale of non-performing assets.
Third, it has leveraged digital collection and recovery capabilities, accurately profiling customers, automatically matching disposal strategies for different customer groups, resolving risks through multiple channels, strictly controlling collection compliance risks, and continuously improving the recovery efficiency of non-performing assets.
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