HONG KONG (BLOOMBERG) - The Hong Kong Monetary Authority is tightening scrutiny over banks' exposure to HNA Group and Dalian Wanda Group, according to a report by Apple Daily.
The city's de facto central bank asked Chinese banks and major lenders in Hong Kong for details on their loans to HNA and Wanda Group, Apple Daily reported, citing unidentified people. Banks were required to submit a survey last week to the HKMA providing information such as total credit extended and outstanding loans to the two Chinese companies.
The HKMA said it engages in discussions with banks on different issues, without commenting further. Wanda declined to comment, while HNA representatives didn't immediately respond to calls and an email seeking comment.
The move comes at a time when mainland Chinese regulators have also stepped up scrutiny of the companies behind last year's unprecedented spree of takeovers outside the country. China has embarked on a drive to reduce leverage in financial markets and snuff out systemic risks ahead of a Communist Party leadership transition later this year, while remaining vigilant for accelerated capital outflows that threaten to weaken the nation's currency.
The country's banking regulator has asked domestic lenders to provide information on overseas loans made to firms including Wanda, HNA and Anbang Insurance Group, people familiar with the matter said in June. Authorities followed that with a directive restricting companies from making "irrational" overseas investments in industries such as real estate, hotels, entertainment and sports clubs.
HNA has been expanding its presence in Hong Kong, spending about HK$27 billion (S$4.68 billion) earlier this year on four government land sites in the former Kai Tak airport area.