China Minsheng Banking Corp. Ltd. and China Merchants Bank Co. Ltd. on Feb. 23 said shareholder Anbang Insurance Group Co. Ltd. has no plans to reduce its stake in the two lenders.
The banks received written notifications from Anbang that said the operations of the insurance group and its subsidiaries are stable with sufficient cash reserves. The insurer added it has no plans to cut its shareholdings in either bank.
Anbang's comments follow same-day action by the China Insurance Regulatory Commission to take control of the insurance group for up to two years after it "broke insurance laws" and in turn damaged its solvency, that is, its ability to pay claims and debt.
In November 2017, Anbang denied media reports it was asked by regulators to cut its stakes in China Minsheng Bank and China Merchants Bank.
According to China Minsheng Bank's 2017 third-quarter financial report, Anbang was the lender's biggest shareholder as of Sept. 30, 2017, with a 15.54% stake, through three accounts: Anbang Life Insurance Co. Ltd.'s steady investment portfolio, Anbang Property & Casualty Insurance Co. Ltd..'s traditional products and the group's traditional insurance products.
As of the same date, Anbang Property & Casualty held a 10.72% stake in China Merchants Bank through conventional products.