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HengFeng Bank, one of the twelve joint-stock commercial banks in China, has confirmed it will stop granting credit to the real estate industry from this Monday onward, including loans to property developers and related companies such as construction firms, Yicai.com reported.

An anonymous insider at the bank said it is a temporary internal management measure based on the company’s loan structure.

But HengFeng Bank is not the only institution forced to tighten its credit strings. Another Beijing-based joint-stock commercial bank, without mentioning its name, has suspended part of its credit business in 2016, in response to the regulator’s crackdown on using off-balance-sheet funds to invest in property development.

It has gradually stopped granting new credit to companies in the real estate industry amid the banking watchdog’s regulatory storm last year.

Taking Beijing as an example, its newly issued individual housing loans have shown a clear downward trend. In 2017, the average new loan per month was recorded as 26.85 billion yuan, 20.42 billion yuan, 14.79 billion yuan as well as 8.73 billion yuan from quarter one to four respectively.

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