You are currently viewing World’s Worst-Performing Bank Lent Billions to Evergrande

World’s Worst-Performing Bank Lent Billions to Evergrande

  • Post author:
  • Post category:Blog

China Minsheng Banking Corporation was once praised as the future of Chinese banking, but an ill-fated push into property lending has instead turned the private lending group into one of the biggest casualties in the evolving real estate debt crisis in China. Hammered by mounting losses on loans to developers, including China Evergrande Group, Minsheng’s stock tumbled 31% in the last 12 months. The bank is among the worst performance in the 155-member Bloomberg World Banks Index. Hedge funds and other short-sellers are also more bearish on the lender than its global peers. The bank will need years to work through its bad debt problem and a capital injection from a stronger rival can’t be ruled out,” said Shen Meng, director at Chanson & Co., a Beijing-based boutique investment bank. Minsheng’s downfall underscores the widening fallout from Chinese President Xi Jinping’s crackdown on real estate and other parts of the country’s capital-hungry private sector. It also presents a warning to global financial firms that are dumping billions of dollars to expand in China. Bets that seem like sure things can quickly sour when the nation’s policymakers decide to change course.