With the disclosure of the annual reports of listed banks in 2021, the risk level of the real estate industry is beginning to take shape.
China Securities News · China Securities Taurus reporter combed the annual reports of several banks on the 29th and found that, on the whole, by the end of 2021, the balance of non-performing loans and non-performing loan ratio of the real estate industry had increased compared with the end of 2020. Insiders said that this is related to commercial banks increasing the provision for the real estate industry.
Referring to the risk level of the real estate industry, the management of many banks said at the performance briefing that the risk exposure is limited and the risk is generally controllable, and will further strengthen the support for affordable rental housing projects and high-quality projects acquired by real estate enterprises in the future.
defective rate increased as a whole
According to the sorting of China Securities Journal · China Securities Taurus reporter, at present, there are Bank Of Communications Co.Ltd(601328) , China Merchants Bank Co.Ltd(600036) , Industrial Bank Co.Ltd(601166) , China Citic Bank Corporation Limited(601998) , Ping An Bank Co.Ltd(000001) , Bank Of Suzhou Co.Ltd(002966) .
Non performing loans of listed banks in real estate industry
Data source: annual reports of banks in 2021
Taking Bank Of Communications Co.Ltd(601328) as an example, by the end of 2021, the balance of non-performing loans in Bank Of Communications Co.Ltd(601328) real estate industry was 5.260 billion yuan, up from 4.711 billion yuan at the end of 2020. However, the non-performing loan ratio decreased from 1.35% at the end of 2020 to 1.25%.
Picture source: Bank Of Communications Co.Ltd(601328) 2021 Annual Report
Ping An Bank Co.Ltd(000001) annual report shows that by the end of 2021, the non-performing rate of the real estate industry was 0.22%, up 0.01 percentage points from the end of 2020, but far lower than the average non-performing rate of 1.02%.
Image source: Ping An Bank Co.Ltd(000001) 2021 Annual Report
For other joint-stock banks, by the end of 2021, China Merchants Bank Co.Ltd(600036) real estate non-performing loan ratio had increased from 0.3% in 2020 to 1.41% Industrial Bank Co.Ltd(601166) the non-performing loan ratio of the real estate industry was 1.08%, an increase of 0.16 percentage points over the end of 2020 China Citic Bank Corporation Limited(601998) the non-performing loan ratio of the real estate industry was 3.63%, an increase of 0.28 percentage points over the end of 2020.
China Citic Bank Corporation Limited(601998) annual report indicates that the solvency of individual real estate enterprises is affected by factors such as the decline in the prosperity of the real estate industry, which increases the debt risk.
Image source: China Merchants Bank Co.Ltd(600036) 2021 Annual Report
Picture source: Industrial Bank Co.Ltd(601166) 2021 Annual Report
Picture source: 601 annual report of 19982021
However, the non-performing rate of real estate loans of listed banks has increased significantly The Bank Of Suzhou Co.Ltd(002966) annual report shows that by the end of 2021, the balance of non-performing loans in the real estate industry was 514 million yuan, and the non-performing loan ratio was 6.65%, while the above two data were 88.802 million yuan and 1.36% respectively at the end of 2020.
In this regard, China Securities News · China Securities Taurus reporter called Bank Of Suzhou Co.Ltd(002966) investor hotline as an investor. The staff responded that on the one hand, it was related to the overall situation of real estate since the second half of last year, on the other hand, the bank took the initiative to increase the provision for the real estate industry with the attitude of clearing risks.
Image source: Bank Of Suzhou Co.Ltd(002966) 2021 Annual Report
risk is generally controllable
For the current progress of housing related risk projects, all banks are optimistic, indicating that the business development is cautious, the mortgage assets are sufficient and the risk is generally controllable.
Ping An Bank Co.Ltd(000001) vice president Guo Shibang said recently that the real estate risk of the bank is generally controllable. Baoneng is the most important real estate accident business, but at present, it has reached a judicial settlement with Baoneng, and the court has issued a mediation letter. Among them, the Baoneng city project with the largest amount of 5.4 billion yuan can immediately enter the judicial auction execution link. If the sales go well, it is expected to form a large pressure drop in 2022.
China Citic Bank Corporation Limited(601998) Vice President Hu Gang introduced that the bank’s real estate loan business presents the following four characteristics: first, it has always taken a more cautious attitude, especially the choice of customers. Second, in terms of guarantee, 99% of the existing real estate is mortgaged to corporate customers. Third, in terms of regional distribution, the total balance of real estate loans in the first and second tier cities exceeds 90%, of which the first tier cities account for more than 50%. Fourth, the provision for real estate loans was increased. The loan allocation ratio exceeded 6%, which was twice that of the public as a whole.
Zou Jimin, general manager of Industrial Bank Co.Ltd(601166) risk management department, said that more than 90% of the bank’s real estate business was self operated assets, and the credit access was strict, which blocked the risk infection of financial management business; About 90% of the self operated real estate asset business is distributed in the first and second tier cities and the central cities of the three metropolitan areas. The asset valuation is relatively stable, and the default rate and default loss rate are relatively small.
“At present, the potential risk of Industrial Bank Co.Ltd(601166) to public real estate projects is about 20 billion yuan, but the asset impairment has been accrued in place.” Zou Jimin said that Industrial Bank Co.Ltd(601166) specially arranged a 20 billion yuan M & a quota, actively promoted high-quality developers who cooperated well with the bank, promoted the decoupling of full value projects from problem developers, and eliminated potential risks in the “guaranteed delivery of buildings”.
will continue to support the development of real estate
The banks said they would continue to support the real estate business and make efforts in the fields of personal housing mortgage loans, affordable rental housing, real estate enterprise mergers and acquisitions and so on.
For Ping An Bank Co.Ltd(000001) in the future, Guo Shibang introduced that he would continue to support the development of ordinary commercial housing, actively support the development of indemnificatory housing and rental housing, and selectively support the M & A of high-quality real estate projects implemented by high-quality enterprises.
In terms of M & a support for real estate projects, in addition to a number of joint-stock banks in the early stage, AMC institutions and large state-owned banks have also joined the ranks recently. On March 25, country garden group and Agricultural Bank Of China Limited(601288) Guangdong branch held a strategic cooperation signing ceremony and signed a 20 billion yuan strategic cooperation agreement on M & A and affordable rental housing and a 20 billion yuan strategic cooperation agreement on housing mortgage. The two sides will further deepen the comprehensive strategic cooperation relationship in the future.
