From BofAML:
Another news which was widely circulated over the past weekend and severely hit markets today was about a mid-sized bank’s decision to halt funding for developers in 1Q14. With some clarification, it’s clear that the Industrial Bank ordered to stop just Mezzanine financing for developers as well as funding for developers’ upstream suppliers such as cement and steel producers. Both types of financing should account for only a small part of banks’ exposure to the property sector (the majority is usually mortgage financing). We believe some interpretations that the Industrial Bank had cut off all funding to developer was significantly distorted. The Industrial Bank’s decision may suggest some changes in its perception on the property sector, but we note that the Industrial Bank is known for its aggressive stance in innovative financing; and we think it might be time for the bank to be a bit more conservative.
