HKMA Said to Encourage Banks to Support Developers' Refinancing

Market sources say Hong Kong's commercial property market is showing a "K-shaped recovery," with industrial and commercial properties in non-core districts still under pressure, and some developers facing refinancing difficulties. According to media reports citing people familiar with the matter, HKMA Deputy Chief Executive Arthur Yuen personally chaired a high-level meeting a few days ago, inviting representatives from the Real Estate Developers Association of Hong Kong and more than 10 local, Chinese and foreign banks, at which he called on financial institutions to adhere to the principle of controllable risk and, as far as possible, provide loan extensions or refinancing support to developers facing debt pressure. Sources indicated that short-term financing loans of several developers will mature in concentrated fashion in the coming months. The HKMA warned the banking sector at the meeting that if individual cases are handled improperly and trigger a chain of defaults, it could further hit Hong Kong commercial property valuations and even affect small and medium-sized enterprises across various industries that use property as collateral for financing. The report said the HKMA declined to comment on specific meeting details, reiterating only that credit risk in Hong Kong's banking system is controllable and encouraging the industry to support the real economy in a pragmatic manner.