China Everbright Bank (6818) has committed to providing more than 10.75 billion yuan (equivalent to HK$11.73 billion) in credit to support residential projects that local governments have identified as eligible for loans under the "whitelists" mechanism. This initiative is designed to channel financial support to select residential developments recommended by local authorities to banks, potentially easing the lending process for these projects.
Major developers, including Country Garden (2007), Sunac China (1918), and Kaisa (1638), have projects that have made it onto these whitelists, positioning them to benefit from the increased financial support.
The Chinese government's goal is to bolster financing for residential projects, but the banking sector's hesitance to lend to the property industry remains a significant hurdle, particularly for developers that are severely cash-strapped and in dire need of funding.
Everbright disclosed that its 29 branches have reviewed the whitelist of projects, approving credit for approximately 20 percent of them, which amounts to the substantial sum of 10.75 billion yuan. This move comes amid a broader context of regulatory scrutiny, as exemplified by the public reprimand issued by the Shenzhen Stock Exchange against a subsidiary of China Evergrande (3333) for its delay in submitting and disclosing financial reports on time.
In a related development, China Resources Land (1109) reported a 29 percent decline in contracted sales compared to the previous year, while Longfor Properties (0960) experienced a dramatic 35 percent drop last month, indicating ongoing challenges within China's property sector.
