MNI BRIEF: China Banks Increase Loans To Developers: NAFR

China's commercial banks increased credit support to developers this year, officials of National Administration of Finance Regulation told reporters on Friday in a briefing, with lenders' net profits expanding at a faster pace than in the first three quarters.

Property development loans, gauging banks’ lending to developers, jumped 183%y/y through end-September to CNY2.4 trillion, and lenders further boosted mortgage loans to first-time house buyers, according to data from NAFR. The net profits of commercial banks was CNY1.9 trillion as of the end-Sept, up 1.6%y/y, compared with 1.2%y/y in the same period last year and 2.6% y/y in the first two quarters this year.

The authorities accelerated the disposal of bad loans, with CNY1.9 trillion disposed of by the end of Q3. The bad loan rate fell 0.05pp to 1.61%, officials said, noting the regulator will continue to resolve risks at small financial institutions. China will continue to open up its financial sector, the officials said, stressing some foreign banks’ decision to tailor down businesses in China has been over concerns of increased uncertainty in the global economy and the three-year pandemic, which is not a long-term trend.