China’s BoCom agrees to support eight property firms

CHINA’S Bank of Communications (BoCom) said on Thursday (Dec 8) that it signed strategic cooperation agreements to support eight property firms, responding to Beijing’s call to ease a severe liquidity crunch in the sector.

The bank said it will deepen cooperation with the property firms, including Longfor, Gemdale and Greentown, in terms of property development loans, loans for M&A deals and bond investments, according to a statement released by the lender.

Chinese authorities have been stepping up measures in recent weeks to support developers after many defaulted on their debt obligations and were forced to halt the construction of homes.

The property sector makes up about a quarter of China’s economy.

BoCom said it will “actively carry out the responsibility of a state-owned bank” and to “continue to optimise the allocation of real estate credit resources”.

Last month, six of China’s biggest commercial banks, including BoCom, lined up at least US$162 billion in fresh credit to property developers.

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Among them, BoCom agreed to provide a 100 billion yuan (S$19.45 billion) credit line to Chinese developer Vanke and a 20 billion yuan credit line to Midea Real Estate. REUTERS