BEIJING (Reuters), – China’s Ping An Bank Co Ltd reported that overdue loans and “special-mention” increased by 3% in Q3 due to a liquidity crisis at Shenzhen Baoneng. This conglomerate is a financial service and property company.

According to Wednesday’s earnings report, Ping An Bank reported that outstanding special-mention loan debts – which could lead to sourness – increased by 37.3% during the third quarter of 2020. However, outstanding loans and interest overdue in 90 days rose 32.5%.

Guo Shibang said that Baoneng is a significant client. He also spoke out to journalists and investors on Thursday.

Guo stated that Baoneng was a risk to the bank’s reputation and prepared for default by making provisions.

Baoneng said that the ultimate risk is manageable. He also stated that the bank’s quality in loans for the real estate sector was still high.

Baoneng, who was known for his hostile and highly leveraged takeover bid to China Vanke Co Ltd in 2015, was a well-known figure. Baoneng’s holdings were diluted when Shenzhen Metro was made Venke’s largest shareholder.

Guo stated that Ping An Bank can collect the principal and part interest from the loans to HNA Group in accordance with its current restructuring plans.