Why do China's major banks intensively discuss real estate companies?

China News Service, Beijing, December 12 (Reporter Wang Enbo) In the past few days, China's major banks, represented by major state-owned banks, have held intensive discussions with real estate enterprises. What are the considerations for banks and enterprises to strengthen docking at this time?

According to the information disclosed by various banks, the form of the discussion is not only "one-to-one", but also more than ten real estate companies face-to-face "group chat", as well as active visits. The topics involved include analysis of the industry situation, further strengthening bank-enterprise cooperation, exploring new models of real estate development, and promoting the steady and healthy development of the real estate industry.

Previously, the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission jointly held a forum for financial institutions to accelerate the supply-side reform of real estate finance. The analysis pointed out that major banks and real estate companies should strengthen communication and exchanges at this time, aiming to implement the relevant deployment of the financial management department, find out the financing needs of enterprises, and solve the difficulties and blockages.

For example, at the bank-enterprise symposium held by China Construction Bank, representatives of real estate companies said that "the financing environment is gradually improving" and "there are still structural opportunities in the real estate market, and there is still firm confidence in the future", but also frankly admitted that they are currently facing phased difficulties and tight liquidity. During the visit and meeting with the Bank of China, real estate companies generally expressed concern about the guarantee of loan lines for new investment projects.

In response to these concerns, a number of banks have made it clear that they will not hesitate to lend, withdraw or cut off loans for real estate enterprises that are operating normally, and have given targeted measures.

For example, the Industrial and Commercial Bank of China proposed to focus on the three major projects of rigid and improved housing, rental housing, etc., such as "urban villages, affordable housing, and dual-use of ordinary and emergency", and increase resource investment in real estate development loans, personal housing mortgage loans, merger and acquisition loans, syndicated loans, and bond underwriting and investment, so as to support the multi-dimensional and reasonable financing needs of real estate enterprises in all cycles.

China Construction Bank also said that it will better support the reasonable financing needs of real estate enterprises, and help enterprises improve liquidity through a full range of financial services such as credit support, investment banking services, bond investment, extension and adjustment of repayment arrangements.

Li Yujia, chief researcher of the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, said that banks have expressed positive attitudes, such as maintaining the stability of financing channels such as credit and bonds, and helping enterprises improve liquidity through a full range of financial services. It is expected that measures such as increasing credit and deploying bond underwriting will be introduced in the future.

Xia Yifeng, chief analyst of the real estate industry at BOCI Securities, also sees this as a positive sign. She expects that banks are likely to ease financing according to their own risk management perspective, which will inject confidence in the real estate market.

It is worth noting that a wide range of real estate companies participated in the recent bank discussions, including state-owned enterprises, private enterprises and mixed-ownership enterprises. Among them, according to the talks, the Postal Savings Bank of China also issued a list of key support for non-state-owned real estate enterprises as soon as possible, clarified the business strategy, and ensured accurate drip irrigation.

In fact, the recent introduction of a series of real estate finance-related policies by the Chinese government has clearly reflected the idea of "meeting the reasonable financing needs of real estate enterprises under different ownership systems without discrimination". For example, the "Notice on Strengthening Financial Support Measures to Help the Development and Growth of the Private Economy" jointly issued by the central bank and other eight departments includes "reasonably meeting the financial needs of private real estate enterprises".

E-House Research Institute believes that the expression "reasonably meeting the financial needs of private real estate enterprises" is a step further than the traditional expression of "financing", indicating that there are more comprehensive ideas and methods for enterprise support. Financial needs include financing needs, investment needs, risk management needs, financial and liquidity-related needs, etc., which means that various types of support will increase in the future, which will help promote the healthy development of enterprises.

Li Yujia pointed out that with the implementation of measures such as "equal treatment" from top to bottom, the "blood transfusion" of banks will play a role in stabilizing the capital chain of real estate enterprises. However, the key to the smooth landing and continuous operation of enterprises is self-"hematopoiesis". To this end, it is necessary to promote the stabilization and rebound of the sales side and enhance the willingness and ability of residents to buy houses. (ENDS)