Five state-owned Chinese banks have been matched with more than 8,200 residential projects for development loans under the "whitelist" mechanism aimed at injecting liquidity into the crisis-hit sector, government-backed media The Paper reported.
The high number of projects already approved for possible support highlights the government's efforts to free up funding for the debt-riddled industry, although it is unclear how many will secure loans.
"The progress for whitelist projects is faster than expected and it looks like regulators have put much higher pressure on banks to lend to developers this time," said Raymond Cheng, head of China research at CGS International.
The mechanism is a key plank of Beijing's efforts to stabilise the sector's debt crisis and boost confidence in an industry that accounts for a quarter of China's GDP.
The sixth state bank, Postal Savings Bank of China (1658.HK), has already approved some loans after receiving "whitelist" projects with 5.7 billion yuan ($792.5 million) of financing needs, although it has not given details on the number of projects involved, The Paper reported.
Among the other five state-owned banks, Industrial and Commercial Bank of China (601398.SS), Agricultural Bank of China (ABC) (601288.SS) and China Construction Bank (601939.SS) had received more than 2,000 applications each.
Bank of Communications (601328.SS) had received 1,442 projects as of Feb. 13, while Bank of China (601988.SS) had approved 75 projects involving close to 40 billion yuan as of Monday, after reviewing more than 110 applications.
ABC had approved nearly 5 billion yuan in loans for more than 10 projects, most of which did not involve state-owned developers, according to The Paper.
CGS International's Cheng expected the 8,000 projects had total financing needs of 3.2 trillion yuan, one third of which would be new loans.
Following the media report the Hang Seng Mainland Properties Index (.HSMPI) gained more than 4% on Friday, with defaulted Shimao Group <0813.HK, KWG Group (1813.HK) and Kaisa Group (1638.HK) jumping more than 10%.
A number of distressed developers, including Sunac China (1918.HK), Greenland (600606.SS) and CIFI (0884.HK), said last week local governments had vetted and approved some of their projects for the whitelists.
China aims to ramp up financing for residential projects but banks' reluctance to lend to the sector could be a major obstacle for distressed developers most in need of funds.
Developers and analysts have said any such loans can only be used for ensuring the completion of selected projects, and cannot be used to repay debt or help regain financial strength.
($1 = 7.1929 Chinese yuan renminbi)
