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Trust firms must control lending risks
By Joyce Pan |
December 10, 2010, Friday
|
Print Edition
Print Edition
CHINA'S banking regulator has urged trust companies to control possible risks arising from loans to property developers to prepare themselves for a correction in the real estate market.
Trust companies should immediately check the property projects individually to ensure that the developers are financially capable, the China Banking Regulatory Commission said in a statement.
Trust firms offer a vital channel for Chinese banks to extend loans to property developers when China tightened bank lending in an effort to avert the creation of asset bubbles.
The property sector has a total of 377.8 billion yuan in outstanding trust funds by the end of September, an increase of 62.5 billion yuan from the end of June, according to the China Trustee Association.
Earlier this year, the CBRC did stress tests on trust firms to evaluate if they could withstand risks from the property market.
Trust companies should immediately check the property projects individually to ensure that the developers are financially capable, the China Banking Regulatory Commission said in a statement.
Trust firms offer a vital channel for Chinese banks to extend loans to property developers when China tightened bank lending in an effort to avert the creation of asset bubbles.
The property sector has a total of 377.8 billion yuan in outstanding trust funds by the end of September, an increase of 62.5 billion yuan from the end of June, according to the China Trustee Association.
Earlier this year, the CBRC did stress tests on trust firms to evaluate if they could withstand risks from the property market.
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