China’s Ping An Bank names 41 mainland developers in funding support list
- The Chinese lender has decided to adjust criteria related to extending credit lines to meet developers’ reasonable funding demands, sources said
- The bank distributed the list to its departments and branches earlier this month, but it was not immediately clear how many and which new names were added to the list
Major Chinese lender Ping An Bank has put 41 developers on a list of property firms eligible for its funding support, a shift towards more lending to a sector in crisis following government steps to staunch the pain.
The bank decided to adjust criteria related to extending credit lines to meet builders’ reasonable funding demands, people familiar with the matter said, requesting anonymity discussing private matters. That mirrors a task that authorities set out in a major annual government economic conference last month, and comes after regulators drafted their own list of developers to guide financial institutions as they weigh more lending.
Market reactions were mixed. Chinese developer dollar bonds were indicated 0.5 cents higher on average after the news. But shares slumped for companies not on Ping An Bank’s list, including Country Garden Holdings, Shimao Group Holdings and Sunac China Holdings.
“It’s hard to say how much benefit companies on that list will receive from the bank’s lending, but companies not on that list will be regarded by investors as abandoned by the bank,” said Shujin Chen, analyst at Jefferies Financial Group. “Ping An Bank’s exposure to the property sector is not small, so its list can also be seen as a signal for the sector.”
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The development offers a fresh example of how financial firms are responding after Beijing stepped up efforts to ease a cash crunch among builders, as an unprecedented housing slump and debt crisis that has led to record defaults worsens. Authorities also recently called on local governments to better support developers’ financing needs, including drafting a list of projects eligible for funding.
The changes to Ping An’s lending criteria also involve areas including risk assessment and approval procedures, according to the people.
