China CITIC Bank upbeat on housing market

China's housing sector will land safely in the medium to long term, said a senior executive of China CITIC Bank Corp Ltd on Friday.

"Risks associated with the real estate sector still exist in the short term, and market confidence has not yet recovered. But taking the medium- to long-term view, we are confident that China's housing sector will land safely. Commercial banks will see good opportunities for growth in those real estate developers that have survived after divergence in the sector," said Hu Gang, vice-president and chief risk officer of China CITIC Bank, at a news conference announcing 2022 interim results of the Beijing-based national joint-stock commercial lender.

At the end of June, the balance of the bank's corporate real estate financing bearing credit risk, including actual and contingent credit, proprietary bond investment and proprietary non-standardized investment, stood at 398.7 billion yuan ($58.12 billion), representing an increase of 988 million yuan from the end of last year. Among its corporate real estate financing bearing credit risk, the balance of corporate real estate loans amounted to 291.61 billion yuan, up 6.81 billion yuan from the end of last year.

The bank's ratio of non-performing loans in real estate was 2.89 percent by the end of June, down 0.74 percentage point from the end of the previous year.

"We will strengthen post-lending risk management of corporate real estate loans and pay close attention to potential secondary risks in the upstream and downstream industrial chain of some real estate developers where risks have occurred. In addition, we will continue to adopt differential policies for real estate corporate customers," Hu said.

China CITIC Bank will also support mergers and acquisitions of key housing projects by quality real estate developers and ramp up efforts to better meet the strict and upgraded demand for housing, he said.