Minsheng Bank and the Threat China’s Property Crisis Poses to Lenders

The country’s 11th biggest bank, already under scrutiny from regulators, has an alarming amount of exposure to real estate loans, and it’s not alone

In recent years, the real estate sector in China has been hit by a series of crises, from China Evergrande Group, China Fortune Land Development Co. Ltd. to Country Garden Co. Ltd., with dozens of large property developers sinking into the mire. This turmoil subsequently affected the trust industry, washing away trillions in wealth from Chinese households. Yet, should a major commercial bank fall victim to this storm, the situation will only grow more terrifying.

A few days ago, someone asked me, “Will Minsheng Bank be the first joint-stock bank to fall?” Rumors are circulating that Minsheng Bank, due to its deep ties with real estate companies, might be at risk of a sudden collapse.

The question genuinely startled me.