China’s escalating push to have its banking behemoths back up struggling property firms is adding to a maelstrom of woes for the US$57 trillion (S$76 trillion) sector.
Already stung by soaring bad loans and record-low net interest margins, lenders such as the Industrial and Commercial Bank of China (ICBC) may soon be asked for the first time to provide unsecured loans to developers, many of which are in default or teetering on the brink of collapsing.
The risky lifeline threatens to exacerbate an already bleak outlook. ICBC and 10 other major banks may in 2024 need to set aside an additional US$89 billion for bad real estate debt, or 21 per cent of estimated pre-provisions profits in 2024, according to Bloomberg Intelligence. Lenders are now weighing lowering growth targets and cutting jobs as among possible options, according to at least a dozen bankers, who asked not to be named discussing internal matters.
China’s banks have been caught between the opposing demands of providing “national service” by supporting the property sector and distressed local governments, and their obligation to run a sound business. Boosting profits has almost become mission impossible for some.
Beijing ratcheted up pressure on the lenders even more last week to reverse the housing meltdown. Regulators are working on a draft list of firms eligible for bank support, while weighing a plan for lenders to offer developers unsecured loans for the first time. This is on top of a recent order for the banks to roll over local government debt at favourable terms to avert a crisis in that US$9 trillion market.
Denne historien er fra November 29, 2023-utgaven av The Straits Times.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra November 29, 2023-utgaven av The Straits Times.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Response to retention of Siglap block shows everyday buildings have value
As to what to do with it now, one could look to Hong Kong's Mei Ho House for inspiration
Worker taken to hospital after falling 2.3m at RTS Link construction site
A construction worker was injured on Oct 10 after falling from a height of about 2.3m at a worksite for the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link station in Woodlands North.
Battered Florida begins long road to recovery after major hurricanes
Many still without power, water and sewage services; clearing of debris may take months
Famous red gate at Tokyo university in danger of collapsing
TOKYO — Generations of Japan’s top scholars and leaders have passed through it on their way to building an advanced society. Now the Akamon Gate, the distinctive red gate on The University of Tokyo’s campus in central Tokyo, is in danger of collapse.
Northern Lights animate night skies around the globe
NEW YORK - Night skies came aglow on Oct 10 with the shimmering palette of the Northern Lights, or aurora borealis.
Remains of climber who went missing 100 years ago found on Everest
KATHMANDU – A documentary team discovered human remains on Mount Everest apparently belonging to a man who went missing while trying to reach the summit of the peak 100 years ago, National Geographic magazine reported on Oct 11.
From timber to tech Sibu's spotty transition to joining Sarawak's booming economy
SIBU, Sarawak - On the hour-long cruise along Sibu's waterfront, a recorded audio commentary boasts that the town once had more millionaires than anywhere else in Borneo, thanks to the post-war timber boom.
Two Singaporeans among six opera performers arrested in Penang
BUTTERWORTH, Penang - Six foreign opera actors, including two Singaporean women, were apprehended in Penang, Malaysia, for allegedly breaching their social visit passes by staging performances.
Woman in Russian tank factory sent to penal colony for selling info to Ukraine
MOSCOW - A woman who worked for a Russian tank factory was convicted of treason and sentenced to 12 1/2 years in a penal colony on Oct 11 for selling military information to Ukraine.
Malaysians capitalising on stronger ringgit to buy gadgets
GEORGE TOWN, Penang - With the ringgit on an upward trend, upgrading electronic gadgets seems to be on everyone's minds in Malaysia now.
