Three of China’s biggest commercial banks have agreed to provide fundraising support to property developers, including industry giant Vanke, in a coordinated effort to support the country’s property sector.
It marks one of the latest moves by state-owned banks to respond to the Chinese authorities’ move to help the ailing property sector with policy tools, including reducing housing loan interest rates and down payment ratios, as well as issuing a special loan of 200 billion yuan ($28.03 billion) to guarantee the delivery of property projects.
Bank of Communications Co Ltd (BoCom) said it agreed to provide a 100 billion yuan line of credit to Vanke and a 20 billion yuan line of credit to Midea Real Estate Holding Ltd, two separate statements issued by the bank said on Wednesday.
Under the agreements, BoCom will likely offer the above two developers property development loans, loans for M&A deals and bond investments.
Also on Wednesday, Agricultural Bank of China Ltd said it has signed strategic agreements to provide fundraising support to five property companies, including Vanke, Longfor Group Holdings Ltd and China Resources Land Ltd.
‘Guaranteeing the delivery of houses’ was set as a key task by the central government in July and since then a number of measures have been rolled out, such as allowing asset management companies to take part in project restructuring and encouraging local governments to form bailout funds.
(With input from Reuters; cover image via CFP)