HK checks bank loans to HNA, Wanda

HONG KONG • The Hong Kong Monetary Authority (HKMA) has asked banks in the city for details of their loans to HNA Group and Dalian Wanda Group, according to people familiar with the matter.

Lenders have to submit a survey to the city's de facto central bank providing information such as total credit extended and outstanding loans to the two companies, said the people, who asked not to be identified. Checks on lending to Chinese conglomerates have been stepped up in recent weeks, one of the people said.

In a statement to Bloomberg, HKMA said it engages in discussions with banks on different issues. It is common practice for the authority to query banks over their exposures to certain sectors, as it has done with property loans in recent months.

While the checks are not a guarantee of any regulatory action, the spotlight on real estate did lead to lending curbs in a bid to rein in the city's rampant housing market.

HNA has been expanding its presence in the territory, spending about HK$27 billion (S$4.9 billion) earlier this year on four government land sites in the former Kai Tak airport area.

Responding to a Bloomberg request for comment, HNA said its Hong Kong businesses were in strict compliance with local regulations and the group's operating situation was in "good shape".

Wanda declined to comment.

HKMA's scrutiny on loans to the two was reported by the Apple Daily earlier. 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 over 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.

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A version of this article appeared in the print edition of The Straits Times on September 05, 2017, with the headline 'HK checks bank loans to HNA, Wanda'. Print Edition | Subscribe