Developers’ loans 30% Monetary Authority concerned about growth outperformed the bank’s overall loan and then to the bank for review
Last year, a number of high-priced deals broke out. Although the HKMA tightened bank lending to developers, the amount of loans granted by Hong Kong banks to developers last year increased by 28%, which outperformed the overall loan growth. Ruan Guoheng, the vice president of the HKMA, said yesterday that it intends to conduct a special review of property developer loans to see if there is any need to increase risk management measures to ensure that the industry still has the ability to cope with risks once the credit cycle goes down. Ming Daily reporter Liao Yi Ran
According to figures disclosed by the HKMA yesterday, the overall loan growth of Hong Kong banks last year was 16.1% year-on-year, the largest increase in nearly six years (see chart). Among them, loans to developers increased by 28%, more than the overall increase, The total amount of outstanding loans to developers will increase to 660 billion yuan.
Last year, lending loans increased unabated
In fact, in view of the fact that developers have been offering high mortgage mortgages to property market buyers in recent years and property prices have also been boosted by high prices, the HKMA introduced two measures in May last year to restrict banks from borrowing from developers, including restricting banks’ The project loan should not exceed 40% of the premium, 80% of the construction cost and 50% of the expected value of the completed property, while increasing the bank’s capital requirements for the developer’s loan (see table). However, bank loans to developers continued to increase substantially throughout the year. For example, Nan Fung recently granted Hang Seng Bank (0011) a loan of over 60% of the market value at a commercial price of Kai Tak. According to industry analysis, Hang Seng is a pledged loan I believe including the commercial cost of construction.
Chan King-hong, assistant chief executive of the HKMA (bank supervision), said that the substantial increase in related loans last year was mainly due to the increase in the number of real estate projects including the sale of land, meanwhile, developers took advantage of low interest rates to lock in the flat money. However, the authorities did not understand the details of the industry and the funds were lent to Hong Kong-invested or Chinese-funded property developers.
Ruan Guoheng: Do you have enough financial assessment?
Ruan Guoheng, the HKMA’s vice president, said the authorities are not particularly concerned about the financial status of developers. However, due to the rapid growth of related loans, the HKMA plans to conduct a special review this year to see if there is any need to increase the risk management measures. He stressed that the special review is comprehensive and does not specifically target one or two developers. He also said that in May last year, the tightening measures aimed at banks lending to developers only lasted for less than a year. The effectiveness of the lending has yet to be observed and no “spicy” plans have been proposed for the time being. The authorities will focus their attention on whether the banks are prudent in lending And take relevant risk management measures, including careful assessment of the financial position of developers to ensure that the risks are dealt with as the credit cycle goes down.
Industry: Actually, itemized items
Some people in the banking sector said that the so-called special review is actually a “check-up”. Banks have to submit all information about loans to developers from the HKMA. The authorities scrutinized each of them to find out whether the trade violated the rules. The bankers believe that the special review is conducive to market development, because it can ensure that powerful developers can borrow. However, he thinks that the regulations set by the HKMA last year have been quite harsh. Many trades have been torn down by the regulation last year. If the regulation is further tightened, not only bank business is damaged, but also the land supply is more likely to be detrimental to the property market.