Original title: Many banks dragged down by large accounts of the sudden increase in non-performing loans in the real estate industry
Securities Times reporter An Yi
With the continuous strengthening of supervision of the real estate industry and macro-policy control, some real estate companies with high leverage in the past have encountered significant difficulties, and credit banks will inevitably be affected.
Judging from the disclosed data in the semi-annual reports of banks, due to the impact of new bad loans from individual large accounts, bad loans in the real estate industry of banks have shown an upward trend across the board. Among them,China Merchants Bank、Ping An BankAt the end of June, the balance of non-performing loans in the real estate industry was 4.33 billion yuan and 1.66 billion yuan, which are 3.6 times and 2.9 times the size of the beginning of the year.
Looking forward to the second half of the year, a number of listed bank executives stated at the semi-annual report performance exchange meeting that they will continue to strictly control the total amount and proportion of real estate loans, pay attention to the adjustment of structural optimization, control the entry of customers and projects, and increase the stock. Loan risk investigation and inventory non-performing disposal efforts.
The surge in non-performing loans
Up to now, nine listed banks have disclosed complete semi-annual reports.DivideBank of Changsha、Changshu Bank、Sunong BankIn addition, the remaining six banks all disclosed the scale and non-performing conditions of real estate loans. On the whole, the sudden increase in non-performing real estate loans has become a common trend, especially in China Merchants Bank and Ping An Bank.
At the end of June, China Merchants Bank’s real estate loan balance exceeded 400 billion yuan, and the non-performing loan balance increased sharply by 264% from the end of last year to 4.33 billion yuan. The non-performing rate also rose to 1.07% from 0.3% at the end of last year. Prior to this, the balance and proportion of non-performing loans in the real estate industry of China Merchants Bank showed a significant “double decline” for two consecutive years.
The same is true for Ping An Bank. At the end of June, the bank’s non-performing loans in the real estate industry reached 1.66 billion yuan, 2.9 times that of the end of last year, and the industry’s non-performing rate rose to 0.57%. Similarly, Ping An Bank’s real estate loans had a significant “double fall” in the previous two years.
More intuitive comparison data is that in the first half of the year, China Merchants Bank and Ping An Bank’s real estate industry non-performing loans increased by 3.1 billion yuan and 1.1 billion yuan respectively.
Among the city commercial banks, Jinzhou Bank, which is listed in Hong Kong, slightly increased its loan balance in the real estate industry to nearly 30 billion yuan at the end of June, and its industry non-performing rate rose from 5.45% at the end of last year to 7.7%, temporarily ranking the “leading” echelon of listed banks.
In addition,Bank of ShanghaiIn recent years, real estate loans have been greatly expanded. The balance of corporate loans in this industry has increased from 50 billion yuan at the end of 2016 to more than 150 billion yuan, accounting for nearly 16% of the bank’s total loans. At the same time, the bank’s real estate industry has rapidly emerged as non-performing loans: at the end of 2018, 2019, and 2020, the balance of non-performing loans was RMB 50 million, RMB 360 million, and RMB 3.75 billion, respectively. As of the end of June, the Bank of Shanghai’s real estate non-performing loan balance reached 4.72 billion yuan, an increase of 1/4 from the end of last year, and the industry’s non-performing loan ratio rose to 2.73%, which was significantly higher than the bank’s non-performing loan ratio.
Bank of NingboIn the first half of the year, the loan balance of the real estate industry dropped slightly, and the industry’s non-performing rate rose slightly to 1.48%;Bank of NanjingAt the end of June, loans to the real estate industry had zero non-performing loans. As of the end of June, the balance of corporate loans invested by the two city commercial banks in real estate was around 36 billion yuan, accounting for less than 5% of the bank’s total loans.
Real estate loan risk exposure
As for the risk exposure of loans in the real estate industry, China Merchants Bank has actually pre-judged it a long time ago. The bank stated in its annual report last year that it is expected to have high leverage ratios, heavy interest-bearing liabilities, and the proportion of projects in third- and fourth-tier cities in 2021 due to the “three red lines” financing new regulations and the management of the concentration of commercial bank real estate loans. The financing ability and repayment situation of high real estate companies may deteriorate, and the pressure on funds may increase.
“From the perspective of our bank’s real estate loan performance in the first half of the year, it is mainly due to the fact that some real estate companies with high leverage ratios and over-expansion in the past have encountered relatively greater pressure on cash flow.China FortuneTwo customers of Sichuan Blu-ray. “At the performance exchange meeting, the head of the risk management department of China Merchants Bank said.
The person in charge also said that with regard to the rapid increase in non-performing loans in the real estate industry, there are active judgments made by China Merchants Bank based on the cash flow pressure of credit-granting real estate companies, and active exposure actions made after some forward-looking judgments based on the possible risks of real estate companies.
Guo Shibang, vice president of Ping An Bank, also revealed at the performance briefing that “the increase in non-performing loans in the real estate industry in the first half of the year was mainly due to a household’s non-performing loans of RMB 1.2 billion. If it were not for this household, the non-performing rate in our industry would be only 0.2%. .”
He also disclosed the bank’s credit to China Fortune at the performance meeting. “China Fortune Land Development’s credit exposure in our bank is RMB 1.6 billion, including structured financing of RMB 1 billion, and debt investment of USD 90 million. Provisions have been made in full. In addition, we do not assume credit risk for private bank agency sales. Relevant responsibilities will be fulfilled, and communication with product managers and financing parties will be actively maintained to safeguard the rights and interests of customers.”
The Bank of Shanghai attributed the fluctuation of the real estate industry’s non-performing loan rate in the first half of the year to “the impact of factors such as the lack of progress in the rental and sales of individual projects and the decline in repayment ability”, and will “continue to pay attention to the risks of the capital chain of real estate enterprises.”
Compared with intensifying the collection and disposal of bad stocks, it is more important to have a good access and securely develop credit business in the real estate industry.
The head of the risk management department of China Merchants Bank stated at the performance meeting that in the second half of the year, the management of real estate companies will be further strengthened to maintain the overall stability of the asset quality of the industry. Among them, in terms of customer standards, it is necessary to further increase the proportion of strategic real estate customers divided into two levels; regionally, the real estate development business will further focus on first- and second-tier cities and quasi-first- and second-tier cities; in terms of business structure, priority will be given to supporting rigid-needed and improved housing.
“We have also conducted a comprehensive investigation on the closure and management of the entire real estate development loan. From the investigation, the quality of the entire China Merchants Bank real estate development loan is relatively stable.” The aforementioned person in charge of China Merchants Bank said.
The Bank of Shanghai also stated that it will determine the access standards based on the five elements of “location, business format, customers, cost, and return”, focusing on supporting rigid and improving housing development and housing demand in first- and second-tier core cities, and strictly controlling operating property projects and real estate. M&A loans.
Guo Shibang revealed that Ping An Bank has made major adjustments in the selection of regions for real estate loans this year. “In the past, we may be more inclined to be in first- and second-tier cities, but this year some second-tier cities are not so good, so we put the “first- and second-tier cities” The standard has been changed to’first-class cities’ and’second-class cities’.”
“In other words, some second-tier cities have been excluded, and some third-tier cities have been whitelisted. The selection criteria are mainly based on whether the city has a net population inflow, whether the industry is strong, etc., and the project is mainly based on it. Is there any cash flow?” Guo Shibang explained.
In addition, the statements of various banks generally mentioned that they will strictly control the scale and proportion of real estate loans in accordance with regulatory requirements, and implement management requirements such as monitoring the concentration of real estate.
According to regulatory requirements, the upper limit of the proportion of real estate loans and personal housing loans of the three medium-sized banks of China Merchants Bank, Ping An Bank, and Bank of Shanghai are 27.5% and 20%, respectively; the upper limit of the proportions of Bank of Nanjing, Bank of Ningbo, and Bank of Jinzhou are two. They are 17.5% and 22.5% respectively.
From the actual situation, as of the end of June, among the aforementioned six banks, only China Merchants Bank accounted for 32.2% and 24.7%, respectively, but they have declined compared with the end of last year; Ping An Bank accounted for 9% respectively. , 19.1%.
“Our two indicators are far from the regulatory requirements, but this does not mean that we have the opportunity. It does not mean that we can put out a lot of real estate loans immediately, but we must follow the regulatory requirements.” Guo Shibang said.
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