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Bank regulator warns of soaring estate loans Soaring lending for real estate deals poses a serious risk for China's already debt-swamped banks, the country's banking watchdog says. The warning comes amid a series of government measures to help curb speculative real estate investments that have slowed such dealings and caused prices to drop in some areas.
The report did not say what the top categories were. However, the big state banks face chronic problems with defaults by state-owned businesses, despite repeated efforts to boost risk controls and clear the lenders' accounts of nonperforming loans. Total lending for real estate purchases reached 2.6 trillion yuan (US$315 billion) by the first quarter of this year, the report said. Of that total, 800 billion yuan (US$97 billion) went to property development,
it said. He also warned that some loans were acquired using falsified documents. Some investors are already feeling the pinch from recent government efforts to curb speculative dealings that pushed real estate prices sharply higher. In one case, a district court in Songjiang, a Shanghai suburb, ordered an investor from nearby Zhejiang province to pay 60,000 yuan (US$7,300) to a real estate firm after he failed to fully pay for seven apartments he bought last year, the state-run newspaper Shanghai Daily reported Monday. The buyer, identified only by the surname Ling, bought the apartments for 3 million yuan (US$363,000) with a down payment of 600,000 yuan (US$73,000), expecting to sell the apartments and earn quick cash to repay the balance of the purchase, the report said. In the meantime, the market cooled and Ling was unable to sell the apartments. The court ordered the Ling's contract with the real estate firm canceled, the report said. |
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