Minsheng Bank Says Exposure to Troubled Shareholder Manageable

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Orient Group is among the top 10 shareholders of Minsheng Bank

A major shareholder’s deepening debt troubles have thrust China Minsheng Bank Corp. Ltd. (600016.SH), the country’s largest privately owned bank, into the spotlight, although the lender has confirmed its exposure to risky loans is manageable.

Orient Group Inc. (东方集团股份有限公司)(600811.SH), the Shanghai listed arm of private investment conglomerate Orient Group Co. Ltd. (东方集团有限公司), said in a recent filing that a creditor has filed a petition seeking bankruptcy restructuring of Orient Group Inc. for unpaid debts.

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China Minsheng Bank's exposure to risky loans is manageable despite major shareholder Orient Group Inc.'s bankruptcy petition.
Orient Group, holding 2.92% of Minsheng Bank, owes 7 billion yuan, secured by property and equity.
Loans to Orient Group and China Oceanwide are small portions of Minsheng Bank's portfolio, with active risk mitigation in place.

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Who’s Who

China Minsheng Bank Corp. Ltd.: China Minsheng Bank Corp. Ltd. is the largest privately-owned bank in China. It has recently faced challenges due to debt troubles of major shareholders such as Orient Group Inc. and China Oceanwide Holdings Group Co. Ltd. The bank's exposure to risky loans is considered manageable, with secured loans backed by property and equity pledges. Minsheng Bank continues to mitigate associated risks and protect creditor and shareholder interests.

Orient Group Inc.: Orient Group Inc. (600811.SH) is the Shanghai-listed arm of Orient Group Co. Ltd. It faces bankruptcy restructuring due to unpaid debts to Heilongjiang Donghui Construction Engineering Co. Ltd. The parent Orient Group and controlling shareholder Zhang Hongwei plan to sell assets to address liquidity issues. Orient Group Inc. holds 2.92% of Minsheng Bank's A-shares, and Zhang is the bank’s vice chairman. The parent company spans multiple sectors, including agriculture, energy, and finance.

Orient Group Co. Ltd.: Orient Group Co. Ltd., established in 1978 during China's Reform and Opening-Up, is a major investment holding enterprise with a diverse portfolio that includes agriculture, foods, oil, natural gas, new energy, information security, finance, and transportation. It was among the first private companies in China to undergo shareholding reforms for public listing. The group controls stakes in four listed companies: Orient Group Inc., Minsheng Bank, United Energy Group Ltd., and Jinzhou Port Co. Ltd.

Heilongjiang Donghui Construction Engineering Co. Ltd.: Heilongjiang Donghui Construction Engineering Co. Ltd. is a creditor that has filed a petition seeking bankruptcy restructuring of Orient Group Inc. due to unpaid debts. The company claims that Orient Group Inc. has a clear inability to repay its debts but holds some restructuring value.

China Oceanwide Holdings Group Co. Ltd.: China Oceanwide Holdings Group Co. Ltd. is a major shareholder of Shanghai and Hong Kong-listed Minsheng Bank. Since late last year, it has been experiencing a debt crisis. By the end of 2023, Minsheng Bank's outstanding loans to China Oceanwide amounted to 18.7 billion yuan, representing a small fraction of the bank’s loan portfolio. The bank is actively working to mitigate associated debt risks and has made proactive provisions.

United Energy Group Ltd.: The article mentions United Energy Group Ltd. as one of the companies in which Orient Group currently holds a controlling stake. However, it doesn't provide further details about United Energy Group Ltd.'s activities or status.

Jinzhou Port Co. Ltd.: Jinzhou Port Co. Ltd. is one of the four listed companies controlled by Orient Group. Orient Group is a major investment holding enterprise established in 1978 with a diverse portfolio that includes agriculture, foods, oil, natural gas, new energy, information security, finance, and transportation.

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What Happened When

Late last year：: Minsheng Bank was affected by the debt crisis of major shareholder China Oceanwide Holdings Group Co. Ltd.

At a Wednesday shareholders meeting：: Gao Yingxin, chairman of Minsheng Bank, discussed the loan reduction and other measures concerning Orient Group at the meeting.

By the end of 2023：: Minsheng Bank’s outstanding loans to Orient Group and its affiliates have reduced to about 7 billion yuan from 9.9 billion yuan.