(Yicai Global) Nov. 24 -- Three large state-owned Chinese banks will provide a wide range of financial services, such as development loans, to a number of real estate developers, including Vanke Group and Longfor Properties, so as to support the flagging property market, Yicai Global has learned.
Bank of China, Agricultural Bank of China and Bank of Communications signed deals with Vanke, Longfor, China Shipping Development, China Resources Land and Gemdale Group yesterday to help with their financing.
Bank of China and Bank of Communications, for instance, have pledged to each provide Shenzhen-based Vanke with extended credit lines of up to CNY100 billion (USD14 billion) or the equivalent in foreign currencies, as well as other financial services.
This is one way in which Chinese lenders are implementing new policies to support real estate, Liu Shui, head of research at the enterprise division of property research firm China Index Academy, told Yicai Global.
More banks are expected to sign their own agreements with developers in the future to increase loans, stabilize real estate investment and lay a better foundation for macroeconomic recovery, he added.
The People’s Bank of China said earlier this week that it is considering providing CNY200 billion (USD28 billion) of interest-free loans to the country’s big commercial banks to help the real estate sector. The financing, which would be made available to banks by March 31 next year, will be mainly used on housing projects at risk of not being finished on time to ensure the punctual delivery of pre-sold homes.
Editors: Tang Shihua, Kim Taylor