Markets· Equity

CBIRC to curb financial risks raised by trusts’ property investments

minutes 2019/07/09 08:18:34
The China Banking and Issuance Regulatory  Commission, trusts, real estate

Jul 09, 2019 (China Knowledge) - The China Banking and Issuance Regulatory Commission (CBIRC) has mandated 10 trust companies not to increase outstanding loans in their real estate financing business for 2019 Q3 to curb risks in China’s property market.

These trust companies which have seen rapid growth in their real estate investment portfolios, have also been disallowed from increasing their investment in real estate projects in Q4 this year without the regulator’s approval.

According to the CBIRC, the growth in the country’s trust companies’ real estate financing business have now exceeded their risk-control capabilities. According to the China Trustee Association, at the end of Q1, trusts’ outstanding amount of real estate investments was RMB 2.81 and the investments in real estate accounting for 14.75 % of trusts’ total investment.

CBIRC will take stricter regulations on trusts’ property investments to curb uncontrolled growth in this sector. It also said that this move would not do much harm to developers’ access to funding, as trusts only account for a small part of real estate companies’ financing.

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