Sources at major banks say no administrative ban was issued
By Li Shen and Feng Zhe
BEIJING (Caixin Online) — Officials from two major banks denied reports that property loans were suspended following a bank lending surge in October.
Agricultural Bank of China (CN:601288 2.67, -0.01, -0.37%) (HK:1288 4.21, +0.05, +1.20%) finished its annual lending target by the end of the third quarter. A source from ABC said property loans were generally halted but no administrative ban had been issued.
“If there are good property projects, we will still lend in the fourth quarter,” said the ABC source.
An official from China Construction Bank (HK:939 7.25, +0.14, +1.97%) (CICHF 0.92, -0.01, -0.54%) made the similar comments.
ABC plans to lend 900 billion yuan ($135 billion) next year, with property development loans accounting for 13% to 15% of the total.
Robust sales in the third quarter lessened capital pressures on property developers despite measures issued by the government to tighten lending. Third-quarter financial reports showed that the cash flow of 60 major property developers hit new highs at the end of the third quarter.
China’s largest publicly-traded property developer, China Vanke (CN:200002 9.78, +0.06, +0.62%) (CVKEF 0.00, 0.00, 0.00%) , posted record sales of 15.5 billion yuan in October despite the tightening measures.
At of the end of October, Vanke sold a total of 7.3 million square meters, and its sales revenues hit 86.9 billion yuan, above the annual target of 80 billion yuan. Its sales revenue is expected to reach 100 billion yuan by the end of this year. Several other property developers have reported completing 90% of their annual sales targets. See this report on Caixin Online.
