Focusing on real estate finance, risk management of small and medium-sized banks and other issues, the State Financial Supervision and Administration has once again voiced its voice. On January 25th, at the press conference on high-quality economic and social development of financial services held in the State Council Press Office, Xiao Yuanqi, deputy director of the General Administration of Financial Supervision, Liu Zhiqing, spokesperson of the General Administration of Financial Supervision and head of the Statistics and Risk Monitoring Department, Li Mingxiao, spokesperson of the General Administration of Financial Supervision and director of the Policy Research Department, Guo Wuping, director of the inclusive finance Department of the General Administration of Financial Supervision, and Yin Jiangao, head of the Property Insurance Supervision Department of the General Administration of Financial Supervision, made five major articles on how to do a good job in real estate finance, risk management of small and medium-sized banks.
Promoting the coordination mechanism of urban real estate financing has achieved results
Maintaining the stable and healthy development of the real estate market is one of the key points of supervision in recent years. In order to do a good job in real estate financial services, in recent years, the regulatory authorities have issued a series of policies, including the Ministry of Housing and Urban-Rural Development, the People’s Bank of China, and the General Administration of Financial Supervision, which clearly defined the housing credit policy of "recognizing housing but not loans"; The People’s Bank of China and the General Administration of Financial Supervision issued the "16 financial measures" to support the stable and healthy development of the real estate market, studied and established the dynamic adjustment mechanism of the first home loan interest rate policy, lowered the lower limit of the second home interest rate policy, and guided banks to reduce the interest rate of the first home loan.
"These policies and measures have played and are playing an active role in doing a good job in real estate financial services, stabilizing the reasonable financing needs of the real estate market and promoting the stable and healthy development of real estate." Xiao Yuanqi said.
The data shows that up to now, the balance of development loans and personal housing loans of real estate enterprises is 12.3 trillion yuan and 38.3 trillion yuan respectively. In 2023 alone, the balance of the two loans totaled nearly 10 trillion yuan.
Xiao Yuanqi said that the General Administration of Financial Supervision will continue to provide personal housing loan financial services. Support local city governments and housing construction departments, further optimize individual housing loan policies such as down payment ratio and loan interest rate due to city policies, and guide and urge banks to better serve the financing needs of the broad masses of people’s rigid and improved housing.
In order to accurately support the reasonable financing needs of real estate projects, on January 5, the Ministry of Housing and Urban-Rural Development and the General Administration of Financial Supervision jointly issued the Notice on Establishing a Coordination Mechanism for Urban Real Estate Financing, requiring cities at and above the local level to establish a coordination mechanism for real estate financing and build a communication platform between government, banks and enterprises to promote the accurate docking of housing enterprises and financial institutions.
Xiao Yuanqi said that it is necessary to accelerate the implementation of the coordination mechanism for urban real estate financing. Under the coordination mechanism led by the city government, according to the principle of fairness, the list of real estate projects that can be given financing support is pushed to financial institutions within their respective administrative areas. Financial institutions shall, in accordance with the principles of marketization and rule of law, evaluate the support objects pushed by the coordination mechanism, and actively meet the reasonable financing needs for projects with normal development and construction, sufficient collateral, reasonable assets and liabilities and guaranteed repayment sources.
"In the near future, we will also hold relevant work deployment meetings, asking banks to act as soon as possible. Under the lead coordination of the city people’s government, together with the housing and construction departments, we will make good use of the policy toolbox because of the city’s policy, and more accurately support the reasonable financing needs of real estate projects." Xiao Yuanqi said.
"This meeting released the domestic policies and measures to stabilize the property market, and increased the overall financing support for real estate. At the same time, emphasizing the focus of real estate work this year will help stabilize the market’s confidence in real estate recovery." Zhou Maohua, an analyst in the financial market department of China Everbright Bank, said that with the continuous economic recovery, employment and income improvement, the cost and threshold of buying houses are lowered, which is expected to promote the release of just-needed and improved demand. The "three major projects" in China and the revitalization of various idle properties will help optimize supply and improve demand, and promote the overall real estate market to get rid of the downturn and gradually restore balance.
The reform of rural credit cooperatives has achieved phased results.
Persisting in preventing and controlling risks is the eternal theme of financial work. In recent years, the General Administration of Financial Supervision and other departments have dealt with the risks of small and medium-sized financial institutions in a timely manner, and the reform of the rural credit cooperative system and city commercial banks has been promoted in an orderly manner. Xiao Yuanqi said that from a national perspective, the current small and medium-sized banks are operating steadily, and the proportion of small and medium-sized banks with high risks is very low. Through the steady and orderly resolution and disposal of stock risks and strict control of incremental risks, some small and medium-sized banks with high risks have achieved sustainable operations, and the effectiveness of reform and insurance is emerging.
Deepening the reform through classified policies is the starting point for supervising the reform and risk prevention and control of small and medium-sized banks. Xiao Yuanqi introduced that for the rural credit cooperative system, the General Administration of Financial Supervision focused on transforming the functional orientation of rural credit cooperatives and standardizing the performance of their duties, and initiated the reform of rural credit cooperatives with "one province, one policy". At present, the reform has achieved phased results. Some reform plans of rural credit cooperatives have been approved by the State Council, some are actively organizing and implementing, and some have been put into operation. The phased evaluation has achieved the expected purpose and the effect is showing. For city commercial banks, take multiple measures and implement reforms under the guidance of "one line, one policy". The overall goal is to fundamentally improve the long-term healthy operation and development ability of small and medium-sized banks, better serve the real economy, better serve thousands of households, and better prevent and control risks by deepening the reform of institutional mechanisms.
In order to make small and medium-sized banks stick to their development orientation, serve local customers well, and guard against the risks of exhibition in different places, regulators have previously issued relevant policies on Internet deposits and loans, requiring small and medium-sized banks to focus on their main business.
Xiao Yuanqi said, "Small and medium-sized banks are naturally familiar with local comparative advantages. They should have the will and ability to resist the temptation of blindly seeking perfection regardless of risks, carry out differentiated and characterized operations, and give full play to their unique advantages. After they are brought into play, the future development prospects of small and medium-sized banks are quite broad."
"The General Administration of Financial Supervision has also taken some measures to require large banks and national joint-stock banks, as well as some small and medium-sized banks, to transport talents and technologies, including core customer systems and risk control systems, to small and medium-sized banks in other places. This work has been carried out and the current effect is very obvious." Xiao Yuanqi said.
In addition, in terms of comprehensively strengthening supervision and preventing risks, Xiao Yuanqi said that the General Administration of Financial Supervision will strictly enforce the access standards for small and medium-sized banks, strictly control the access qualifications of shareholders and senior executives, strictly investigate the sources of capital, and give full play to the role of capital in controlling leverage, allocating resources and absorbing losses. At the same time, we should focus on the "key people", "key things" and "key behaviors" of financial risks, strictly enforce the law, dare to show our swords, resolutely crack down on financial corruption and financial crimes, stimulate the endogenous mechanism of financial institutions to prevent and control risks, and further strengthen the solidification, so as to fundamentally prevent, control and stabilize risks.
Ming Ming, chief economist of CITIC Securities, believes that with the continuous advance of China’s tough battle to prevent and resolve financial risks, the risks of the financial system have obviously converged, and the risks of small and medium-sized banks are controllable as a whole. However, it is necessary to pay attention to the lack of standardized corporate governance, mismatch of liabilities and assets, low capital adequacy ratio and long-term high binding with real estate and local financing platforms in some local institutions, which will also bring challenges to their sustainable operation.
Focus on "Five Great Articles"
The Central Financial Work Conference proposed that we should do a good job in "five major articles" on technology and finance, green finance, inclusive finance, pension finance and digital finance, and point out the direction for finance to better serve the high-quality economic and social development.
Focusing on key areas such as scientific and technological innovation and advanced manufacturing, the General Administration of Financial Supervision has continuously improved financial supervision policies, guided financial institutions to increase financial support and enhance their financial service capabilities. Li Mingxiao introduced that in terms of supporting scientific and technological innovation, the General Administration of Financial Supervision has formulated and issued the Notice on Strengthening the Life Cycle Financial Services of Science and Technology Enterprises, guiding more financial resources to promote scientific and technological innovation, and providing diversified financial services according to the needs of science and technology enterprises in different development stages such as initial stage, growth stage and maturity stage. In supporting advanced manufacturing, we will strengthen key monitoring and daily supervision, and guide financial institutions to give more prominence to supporting the high-quality development of manufacturing industry through special meetings and special training, and strongly support the high-end, intelligent and green development of manufacturing industry.
The data shows that by the end of 2023, the loan balance of national high-tech enterprises increased by 20.2% year-on-year, of which medium-and long-term loans and credit loans accounted for more than 40%. The loan balance of manufacturing industry increased by 17.1% year-on-year, of which the long-term loan balance of manufacturing industry increased by 29.1% year-on-year.
In the field of green finance, the General Administration of Financial Supervision has promoted the banking and insurance industry to increase financial support for green development. Li Mingxiao said that the service quality and efficiency of green finance of financial institutions will be continuously improved by strengthening supervision and guidance, improving statistical monitoring, optimizing assessment and evaluation, enriching products and services, and strengthening risk management. According to the data, by the end of 2023, the balance of green credit of 21 major banks reached 27.2 trillion yuan, a year-on-year increase of 31.7%.
By the end of 2023, the balance of inclusive loans was 29.06 trillion yuan, a year-on-year increase of 23.27%, which was 13.13 percentage points higher than the average growth rate of various loans; In 2023, the average interest rate of new loans for inclusive small and micro enterprises was 4.78%, down 0.47 percentage points year-on-year, and the interest rate showed a downward trend year by year.
Guo Wuping said that the General Administration of Financial Supervision will urge banking financial institutions to actively develop the first loan and renew the loan. The renewal of the loan should be continuous and sustainable, encourage medium and long-term loans that match the production and operation cycle, and promote revolving loans that can be borrowed and repaid to meet the diversified financing needs of market participants.
In recent years, China has continued to promote the professional development of pension financial institutions, the reform of pension finance has been steadily advanced, and the pilot projects of pension financing and specific pension savings have been gradually carried out. Yin Jiangyao introduced that in the next step, the General Administration of Financial Supervision will further optimize the supply of personal pension-related financial products around doing a good job in pension finance and implementing relevant policies and opinions on silver-haired economy, study and improve relevant business supervision rules according to the characteristics of personal pension system, sum up experience in time, continue to promote the pilot of commercial pension finance, steadily promote the transformation and development of pension insurance companies, guide and promote companies to give full play to their professional advantages, and better participate in and serve the construction of China’s multi-level and multi-pillar pension insurance system.
In terms of digital finance, Liu Zhiqing said that the General Administration of Financial Supervision will guide financial institutions to improve service quality and efficiency and comprehensively strengthen risk management from five aspects: continuously promoting the digital transformation of the banking and insurance industry, enhancing the effectiveness of digital empowerment, enhancing the risk prevention and control capabilities of the industry, strengthening the risk supervision of network security and data security, and standardizing digital innovation.
It is clearly believed that around the "five major articles", financial institutions should increase the disposal of non-performing credit assets, release new credit space, and reduce credit supply to industries with high energy consumption, high pollution and overcapacity. Relatively speaking, combined with the goal of China’s current economic structure transformation and upgrading and the changes in bank loan structure in the past two years, major strategies, key areas and weak links such as small and micro enterprises, green development and scientific and technological innovation are expected to obtain more high-quality financial services.
Beijing business today reporter Li Haiyan
