An increasing number of Chinese banks including joint-stock and municipal lenders have entered agreements with leading companies in the domestic real estate sector to provide them with various forms of financial support.
During the period from 23 to 24 November all six of the big state-owned banks signed a slew of strategic cooperative agreements with China’s leading real estate enterprises.
Chief amongst them was the Industrial and Commercial Bank of China (ICBC), which entered a strategic cooperative agreement with 12 nationwide real estate enterprises to provide up to 655 billion yuan in financing, including Vanke Group, Gemdale Group, Greentown China, Longfor Properties, Country Garden Group, Midea Real Estate and Radiance Group.
Bank of China (BOC), Bank of Communications (BOCOM) and Postal Savings Bank of China (PSBC) entered similar agreements, to provide financing amounts of 600 billion yuan, 120 billion yuan and 280 billion yuan respectively.
Joint-stock and municipal lenders have since followed the lead of the big state-owned lenders, bringing the total amount of financial support offered by Chinese banks to leading real estate companies to around 3 trillion yuan.
On 1 December, China Everbright Bank entered a strategic cooperative agreement to provide 260 billion yuan in financing to 10 real estate enterprises, including Poly Development, Joy City, Danke, Greentown China, Seazen Holdings, Country Garden, China Jintao, Gemdale Group and CIFI Group.
Under the Agreement, Everbright will focus on real estate development loans, mortgages, takeover loans and bond underwriting and investment.
Shanghai Pudong Development Bank has entered strategic cooperative agreements with 16 real estate enterprises to provide 530 billion yuan in financing, including Vanke, Country Garden, Longfor Group, Greentown China, Midea Real Estate, Yanlord Land, Dahua Group, Poly Development, China Overseas Development, China Resources Land, China Merchants Shekou, China Jinmao, Joy City , Huafa, Yuexiu Real Estate and C&D Real Estate.
Industrial Bank Co. entered strategic cooperative agreements with 10 real estate enterprises to provide 440 billion yuan in financing, including Vanke Group, China Overseas Property, Greentown China, Longfor Group, Binjiang Group, C&D Real Estate, China World Real Estate, Xiangyu Real Estate, Xiamen Anju Holdings and Fuzhou Zuohai Holdings.
Ping An Bank has entered strategic cooperative agreements with two real estate enterprises – Greentown China and Binjiang Group, to provide up to 50 billion yuan in financing, while Guangfa Bank has entered agreements with Country Garden Group and Midea Real Estate Group for up to 30 billion yuan in financing.
Other Chinese banks to enter similar agreements include China CITIC Bank, Bank of Shanghai, Shanghai Rural Commercial Bank and Bank of Ningbo.
The slew of real estate enterprise financing agreements from China’s banking sector arrives just after a push from the Chinese central bank and the banking regulator for them to provide greater support to the property market.
On 23 November the People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) jointly issued the “Notice on Properly Performing Current Work for Finance to Support the Stable and Healthy Development of the Real Estate Market” (关于做好当前金融支持房地产市场平稳健康发展工作的通知).
The Notice outlines 16 measures across six areas, including:
- Maintaining stable and orderly real estate financing.
- Actively and effectively performing financial work to guarantee the delivery of property projects.
- Actively cooperating with real estate enterprises facing difficulty to perform risk disposal.
- Protecting the lawful rights and interests of property finance consumers.
- Stage-based adjustment of financial regulatory policies.
- Intensifying financial support for rental housing.