In the eyes of the industry, the new regulations issued by the central bank limit the real estate credit line from the capital side, which is one of the means of the long-term mechanism of the real estate market. It is expected that the expansion rate of housing-related loans in the banking industry will slow down from next year.
Guard against financial risks and establish a management system of real estate loan concentration.
According to the Notice, in order to enhance the ability of banking financial institutions to resist fluctuations in the real estate market, prevent potential systemic financial risks caused by excessive concentration of real estate loans in the financial system, and improve the robustness of banking financial institutions, the People's Bank of China and the Bank of China Insurance Regulatory Commission decided to establish a management system for the concentration of real estate loans in banking financial institutions.
The notice pointed out that the concentration management of real estate loans refers to the ratio of the balance of real estate loans of banking financial institutions (excluding overseas branches) to the balance of RMB loans of their institutions (hereinafter referred to as "real estate loans") and the ratio of personal housing loans to the balance of RMB loans of their institutions (hereinafter referred to as "personal housing loans") should meet the management requirements of the People's Bank of China and the Bank of China Insurance Regulatory Commission, that is, they should not be higher than the upper limit of real estate loans and personal housing loans stipulated by the People's Bank of China and the Bank of China Insurance Regulatory Commission.
Then, why should we establish a real estate loan concentration management system?
When answering a reporter's question, the People's Bank of China and the Insurance Regulatory Commission of the Bank of China said that according to the "Opinions of the State Council, the Central Committee of the Communist Party of China on Further Implementing the Long-term Real Estate Mechanism and Implementing the Prudent Management System of Real Estate Finance", the People's Bank of China and the Insurance Regulatory Commission of the Bank of China studied and formulated the centralized management system of real estate loans with reference to international experience and combined with China's national conditions, so as to improve the toughness and stability of the financial system and promote the stable and healthy development of the real estate market. At the same time, we will promote the structural reform of the financial supply side, strengthen the internal constraints of banking financial institutions, optimize the credit structure, support the financing of key areas of economic and social development such as manufacturing, science and technology, and weak links such as small and micro, agriculture, rural areas and farmers, and promote the balanced development of finance and real estate with the real economy.
Xu Xiaole, chief market analyst of RealData, said that the new regulation issued by the central bank is to limit the real estate credit line from the capital side, which is one of the means of the long-term mechanism of the real estate market. Its main purpose is to reduce and prevent real estate financial risks and promote the balanced development of real estate, finance and real economy. As far as the reasons are concerned, in the past, financial credit involved a high proportion of real estate, which not only improved the leverage level of enterprises and residents, but also crowded out social credit resources, which was not conducive to building a large domestic cycle.
Pan Hao, a senior analyst at RealData, said that the "three red lines" are the management of the demand side of real estate funds, and the centralized management system of "mortgage-related" is the tightening of the supply side of funds.
Set the upper limit of the proportion of five housing-related loans, and the proportion of personal loans shall not exceed 32.5%.
It is worth noting that the new regulations of the central bank set the upper limit of the balance of housing-related loans of banking financial institutions, set the adjustment time for those who exceed the standard and require the formulation of adjustment plans.
According to the Notice, the People's Bank of China and the Bank of China Insurance Regulatory Commission graded the concentration of real estate loans according to the asset size and institution type of banking financial institutions, and comprehensively considered the scale development of banking financial institutions, the performance of real estate systemic financial risks and other factors, and timely adjusted the coverage of applicable institutions, grading settings, management requirements and statistical caliber of relevant indicators.
Among them, there are two upper limits for the five grades of real estate loan balance and individual housing loan balance. The first grade is large Chinese banks, including China Industrial and Commercial Bank, China Construction Bank, China Agricultural Bank, China Bank, China Development Bank, Bank of Communications and China Postal Savings Bank, with real estate loans accounting for 40% and personal housing loans accounting for 32.5%. The second file is Chinese medium-sized banks, including China Merchants Bank, Agricultural Development Bank, Shanghai Pudong Development Bank, China CITIC Bank and Industrial Bank, with real estate loans accounting for 27.5% and personal housing loans accounting for 20%. The third file is Chinese-funded small banks and non-county agricultural cooperative institutions, with the upper limit of real estate loans being 22.5% and personal housing loans being17.5%; The fourth file is county-level rural cooperative institutions, with the upper limit of real estate loans being 17.5% and personal housing loans being12.5%; The fifth file is village banks, with the upper limit of real estate loans being 12.5% and personal housing loans being 7.5%.
If the proportion exceeds the management requirements and exceeds 2 percentage points, the transition period of business adjustment is 2 years from the date of implementation of the Notice; If it exceeds 2 percentage points or more, the transition period of business adjustment is 4 years from the date of implementation of the notice.
For banking financial institutions that currently exceed the management requirements, the Notice requires the formulation of transitional business adjustment plans. Among them, for banking financial institutions that meet the management requirements of the first and second tranches of real estate loans, they will submit adjustment plans to the People's Bank of China and the Bank of China Insurance Regulatory Commission within 1 month from the date of implementation of the Notice, and report the implementation quarterly. For banking financial institutions that meet the management requirements of the third, fourth and fifth tranches of real estate loans, the adjustment plan shall be submitted to the local branches of the People's Bank of China and the dispatched offices in China Banking and Insurance Regulatory Commission, China within 1 month from the date of implementation of this notice, and the implementation shall be reported quarterly.
Xu Xiaole said that from the perspective of bank classification ratio, the smaller the scale, the lower the upper limit of real estate loan ratio, which is relatively loose for large banks. Pan Hao pointed out that in the past, the space for "small banks" to expand this business through a more "flexible" personal housing loan policy will be limited, and the interest rate and qualification management of personal housing loans will be stricter.
Industry: The expansion rate of bank housing-related loans may slow down in the future.
What impact will the central bank have on banking financial institutions and the real estate market by establishing a centralized management system for real estate loans and setting an upper limit on the balance of housing-related loans?
In this regard, the People's Bank of China and the Insurance Regulatory Commission of the Bank of China said in response to a reporter's question that the establishment of a real estate loan concentration management system is conducive to the formation of stable policy expectations by market participants and the stable, healthy and sustainable development of the real estate market.
Xu Xiaole said that the new policy of the central bank will not have a big impact on the short-term market. First, the set quota ratio is basically in line with the situation this year. The data shows that by the end of the third quarter of this year, the balance of commercial real estate loans accounted for 28.8% of the loan balance of financial institutions, and the balance of personal housing loans accounted for 19.8% of the loan balance of financial institutions, and the average level was lower than the upper limit of management targets. Secondly, according to the actual situation of the bank at the end of the year, set up a transition period. The higher the management requirements, the longer the transition period, so that banks and loan subjects have enough time to adjust smoothly and avoid excessive changes.
Specific to a single banking institution, Ma Hong, a senior researcher at Zhixin Investment Research Institute, said that the indicators of most large and medium-sized banks are relatively healthy, but there are also cases where some large or medium-sized banks "step on the line" on individual indicators, while small and medium-sized city commercial banks may need to make more adjustments in the housing loan business. Specifically, according to the financial report for the first half of 2020, the personal credit balance of CCB and Postal Savings Bank in large banks exceeded the "red line" of 32.5%, accounting for 34.4% and 33.6% respectively, but the housing-related loans of the two big banks accounted for less than 40% overall. Among the medium-sized banks, the balance of personal loans of China Merchants Bank accounted for 24.7%, and the balance of real estate loans accounted for 33.2%, both exceeding the "red line". Among small and medium-sized city commercial banks, a considerable proportion of bank indicators exceed the "red line", such as Xiamen Bank and Qilu Bank.
"It is foreseeable that from 202 1, the expansion speed of housing-related loans in the banking industry will probably slow down. Considering the loan quality (non-performing rate) comprehensively, compared with individual housing loans, the proportion of real estate developer loans may drop even more, which will play an important role in stabilizing the long-term risks of housing finance. " Ma Wei said.
Mahong also said that from the trend, the loan business for rental housing is likely to increase in the future. The "Notice" pointed out that in order to support the vigorous development of the housing leasing market, loans related to housing leasing are not included in the calculation of the proportion of real estate loans for the time being.