In the third quarter, the new trend of housing-related loans of listed banks was reported: the non-performing rate was generally controllable, and the quota control was relaxed

Reporter | Zeng Lingjun

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Since the beginning of this year, the situation of bank housing loans has attracted much attention.

The interface news reporter noted that in the three quarterly reports of listed banks recently disclosed, some banks deliberately increased the special information disclosure of risk control in the real estate field.

"Banks' thinking has changed significantly, on the one hand, it is reducing the stock and checking the risks of real estate loan projects; on the other hand, it is changing in investment direction, and popular cities and regions may no longer be the focus." A joint-stock bank-to-public business person told the interface news reporter.

Due to the impact of the superposition of the industry environment, the amount of bank real estate loans has been tight this year, but the situation has eased after many recent calls from the regulatory authorities.

"The quota control is slightly less stringent, that is, the total amount of unified legal persons is controlled, and the degree of quota tension is relatively relaxed compared with the previous period, but the choice of credit will still strictly implement the requirements of the regulatory level on 3+2 red lines." The head of the financial department of a joint-stock bank told the interface news reporter.

<h3>The non-performing rate of banks involved in housing is generally controllable</h3>

In the three quarterly reports released recently, some banks' non-performing loans and concerned loans have risen to a certain extent.

China Merchants Bank said in the third quarterly report that affected by the credit risk exposure of some real estate enterprises, the bank's non-performing loan ratio to public real estate was 1.29%, an increase of 1.06 percentage points over the end of the previous year, and the asset quality of public real estate loans was within the controllable range. At the same time, the risk exposure of the real estate industry has become one of the important factors for the bank to make provisions for non-credit assets.

Ping An Bank's concerned loans accounted for 1.37% in the third quarter, up 0.26 percentage points from the end of the previous year. Guo Shibang, vice president of Ping An Bank, said on the open day that the number of concern loans increased in the third quarter, mainly because of the liquidity problem of Baoneng, and Baoneng's loans are currently classified as concerns, but the related loans are not all overdue. The bank has made full provisions for Baoneng's non-performing loans, and the credit has sufficient collateral, and the ultimate risk of the mortgaged property is controllable after the mortgage is delivered.

Wang Yifeng, chief analyst of the financial industry of Everbright Securities, said that overall, the credit risk of banks is still controllable, while the marginal risk of real estate is declining, and the quality of bank assets will not be seriously affected by the real estate industry.

Guosheng Securities Bank team recently said in the research report that the tightening of liquidity in the field of individual real estate and urban investment in the third quarter caused pressure on banks, but in the context of the current light burden of bank asset quality stock, the new risk only stayed in individual enterprises, coupled with the repeated voices of supervision to release positive signals, policies or moderate flexibility to relax, the possibility of large-scale risk exposure is low, and special attention needs to be paid to the differentiation of banks in the future.

On October 26, S&P Credit Publishing released a report saying that the real estate industry in the banking industry has been generally controllable recently.

"While the risks in the real estate sector are generally manageable, the risk of individual defaults is rising." A senior executive of a joint-stock bank said.

<h3>Quota control has been relaxed</h3>

Due to many factors, the amount of bank real estate loans this year has been tight, which has affected many parties. The interface news reporter learned that after the recent frequent shouting of regulators, the degree of quota tension has eased and gradually returned to normal.

"There is a certain degree of relaxation, such as personal mortgage loans have recently accelerated the speed of lending, and the amount can be moved between them." A person from a city commercial bank told the interface news reporter.

"However, it is still prudent to be cautious about public loans, driven by the market behavior of commercial banks, and each judges how to further and more effectively control the investigation of concentrated risks in a single industry." A joint-stock banker told the interface news reporter.

At the recent annual meeting of the "2021 Financial Street Forum", Pan Gongsheng, deputy governor of Chinese Min bank and director of the State Administration of Foreign Exchange, pointed out that there have been some fluctuations in China's real estate market and related financial markets recently, which is the stress response of market entities after the occurrence of individual corporate default events. Under the guidance of the expectations of the financial management department, the excessive contraction of risk appetite of financial institutions and financial markets has been gradually corrected, and the financing behavior and financial market prices are gradually returning to normal.

In the first three quarters of this year, the growth rate of real estate loans slowed down significantly. The data shows that at the end of the third quarter of 2021, the balance of real estate development loans was 12.16 trillion yuan, an increase of 0.02% year-on-year, and the growth rate was 2.8 percentage points lower than the end of the previous quarter.

Ma Xiangyun, chief analyst of the banking industry of Soochow Securities, expects that real estate loans will be marginally relaxed in the fourth quarter and will follow two directions; one is that the growth rate of housing mortgage loans will pick up, and the core logic is that the regulatory layer emphasizes meeting the reasonable needs of home buyers; second, the development loan is expected to resume positive growth in the fourth quarter, and the core logic is to meet the reasonable financing needs of healthy housing enterprises and prevent the spread of liquidity risks, but the increase will not be too high, because banks will also be relatively prudent from the perspective of their own risk control.

<h3>Real estate loans play "change"</h3>

Even so, because the logic of the real estate industry has changed, the business model of high leverage, high debt and high turnover will be difficult to sustain in the future, and the logic and way of playing real estate loans by banks have also undergone some changes.

"Our bank has strict requirements for development loans, and the calculated prices are determined according to the principle of low prices of surrounding projects." A joint-stock bank-to-public business person told the interface news reporter that at present, there are only development loans or operating property loans.

Guo Shibang said that while strictly controlling the proportion of real estate loans, Ping An Bank has strengthened the risk control of real estate loans, and the bank will continue to implement the list system management. The list is updated semi-annually and will be a key indicator of customer credit.

The bank also conducted risk checks on the existing real estate business and upgraded the requirements for closed management of funds. In terms of project selection, the bank will focus on selecting cities with net population inflow and strong industrial support, and the project will focus on selecting projects with location advantages, especially projects with good sales prospects and short planning cycles.

China CITIC Bank also said in its third quarterly report that the bank has implemented classified policies and differentiated management for real estate enterprises, and orderly promoted the risk control of credit concentration.

According to Li Mingdong, general manager of the risk management department of China Merchants Bank, in the investment direction of real estate development loans, the bank emphasizes the self-repayment of the project, and strictly manages the real estate development loans; in the selection of development loan projects, the bank concentrates on the just-needed and improved residential buildings in first- and second-tier cities, and actively meets the demand for housing financing while maintaining the stability of the self-supporting cash flow of the entire project.