(Yicai Global) Sept. 13 -- Debt-laden property developer China Evergrande Group said its remaining stake in Shengjing Bank, a major commercial bank in northeastern China, sold at auction for CNY7.3 billion (USD1.1 billion).

The 1.3 billion shares, equal to 14.6 percent of the Shengjing Bank’s total outstanding, were sold through Ali Judicial Auction Platform to a consortium of seven firms, of which three were state-owned enterprises in Shenyang, capital of Liaoning province. They had belonged to Evergrande Nanchang, a unit of the builder.

Shenzhen-based Evergrande said at the end of July that the 1.3 billion shares had been pledged as loan security. And as the homebuilder failed to repay the loan, a court ordered Evergrande Nanchang to execute the pledge.

Evergrande announced last September that it planned to sell 20 percent of Shengjing Bank to state-owned Shenyang Shengjing Finance Investment Group for CNY10 billion (USD1.4 billion) to help repay a mountain of debt. Shengjing Finance became the bank's largest shareholder after the deal.

Analysts said Evergrande’s exit and the takeover of Shengjing Bank by local state funds will be a big boost for the lender, enhancing its credit, enabling business expansion, and widening consumer recognition.

Seeking to expand into the financial sector, Evergrande started buying shares in Shengjing Bank in 2016, with its stake reaching 36 percent in 2019. The bank listed in Hong Kong in 2014.

Net profit at Shengjing Bank dropped 8.4 percent to CNY944 million (USD136.4 million) in the first half from a year earlier due to competition and recurring outbreaks of Covid-19, the lender said in its latest earnings report published on Aug. 23. Revenue fell 5 percent to CNY8.1 billion.

Evergrande has been in a financial crisis since the second half of last year as financing to China's real estate sector tightened. It stopped reporting financial data last September, when the developer said its debt was close to CNY2 trillion (USD290 billion) at the end of the first half of 2021.