(Refiles to fix literal in headline)
BEIJING May 30 China's banking regulator said
on Friday it was stepping up oversight to prevent risks from
some failed property developers from spreading into the broader
financial system, but said overall risk from property loans was
The China Banking Regulatory Commission (CBRC) also urged
commercial banks to work out emergency plans to mitigate risks
stemming from the property sector, in a bid to ease investors'
worries that the cooling real estate market could fuel an
increase in bad loans.
"The overall risk of loans to the property sector is under
control, as the proportion of property loans in total bank
lending is not very high," Wang Junshou, a deputy director at
the general office of CBRC, told reporters at a news conference
to present its annual report.
"We will strictly control property loan risks this year...
and prevent the risk of capital chain breaks in some developers
from spreading to others," the annual report said.
Chinese property developers are feeling the pinch from
slowing property sales and climbing borrowing costs in recent
months, with some smaller players reported funding difficulties
or even cash chain breaks over the past months.
Official figures showed home price growth in China slowed to
a near one-year low in April while property investment also lost
steam in the first four months, fanning concerns of a further
downturn in the sector, which has become a drag on the broader
The annual report also reiterated that the regulator would
continue to strengthen risk control on wealth management
products, barring lenders from channeling depositors' money into
an "asset pool", which is usually opaque and could create room
for illegal operations.
The CBRC also pledged to explore "market-based solutions" to
dispose of bad loans in the sectors plagued by overcapacities to
fend off a build-up of non-performing assets, said the annual
report, without elaborations.
(Reporting by Aileen Wang and Jonathan Standing; Editing by
Paul Tait & Kim Coghill)