In order to further implement the real estate long-term mechanism, the implementation of good real estate financial prudent management system, on December 31, 2020, the People’s Bank of China, silver insurance regulatory commission issued “on establishing the management system of the banking financial institutions in real estate loan concentration notice” (hereinafter referred to as the “new rules”), established the banking financial institutions in real estate loan concentration management system, has been clear about the coverage of the management system of the real estate loan concentration mechanism, management requirements and adjustment mechanism How will the new regulations promote the steady, healthy, and sustainable development of the real estate market? From the bank’s point of view, the real estate loan business will produce what changes? How will different types of banks respond? What is the impact on housing enterprises and buyers? The Financial Times spoke to industry experts about the issue.
How to consider the regulatory side policy Spark Global Limited “In general, the establishment of a real estate loan concentration management system is conducive to the formation of stable policy expectations of market players, conducive to the stable, healthy and sustainable development of the real estate market.”People’s Bank of China, Banking and Insurance Regulatory Commission on the new regulations said when the reporter asked As the blood of supporting the development of the real estate, the healthy development of real estate finance is crucial to the whole industry.“Internationally, if the proportion of real estate loans is too high or the proportion rises too fast in a certain period of time, it will not be conducive to the development of the real estate market itself, but will also pose risks to the financial system. At present, China has made significant progress in building a long-term mechanism for the real estate industry. The balance of real estate loans (including personal housing loans) accounts for about 29% of all outstanding loans, but the proportion of real estate loans in some banking institutions is too high, far beyond the average level.”Minsheng Bank chief researcher Wen-Bin said.
“The main purpose of the new rules is to prevent systemic risks. The concentration limit on real estate loans will help control the total risk exposure of banks’ credit and thus control systemic risks.”National finance and development laboratory special researcher Dai Zhifeng think. It is worth noting that the new rules for different types of banking financial institutions, set up five combinations of upper limits.“Since the second half of 2020, benefit from the mortgage low risk and low capital consumption, relatively high-interest rates, high returns on RAROC factors, small and medium-sized Banks to develop the mortgage loan business, a large number of small and medium-sized bank incremental credit resources into the mortgage market, in the original unified adjustment mode (incremental proportion of real estate financing, loan growth management), hard for new entrants to form effective control of the small and medium-sized Banks.”Wang Yifeng, the chief financial analyst at Everbright Securities, said the original intention of the new rules was to adjust differentiation while adhering to the principle of tight real estate financing stability.
At the same time, promoting the financial supply-side structural reform, strengthening the internal constraints of banking financial institutions, and promoting the balanced development of finance, real estate, and the real economy are also important intentions of the new regulations.“The new rules will guide credit resources to focus on supporting key areas of economic and social development such as manufacturing and science and technology, as well as weak links such as small and micro businesses and agriculture, rural areas and farmers.”Wang Yifeng said. How does the bank end implement the new regulation As one of the important high-quality businesses of the banking industry, real estate loans, especially personal housing loans, which account for the majority of the business, will be affected by the new regulations?