, China
Photo courtesy of Denys Nevozhai (Unsplash)

China’s shadow banks scramble for new business as property credit collapses: report

One shadow banking employee saw his yearly pay plunge from $500,000 to $34,000.

Chinese shadow banks’ are seeing their single biggest revenue stream dry up in the wake of a collapse in capital demand from property developers amidst a government clampdown, reports Reuters.

Data from industry-tracking website Yanglee.com shows that only 1,483 real estate-related trust products were sold in 2022 through the end of September. This is 69.7% lower from  the 4,891 sold in the first nine months of 2021.

The value of the 2022 deals also plummeted 77.9%, at only CNY117.2b during the same period. In comparison, the value of deals from January to September 2021 was CNY531.3b. 

ALSO READ: China’s banking sector to polarize in 2023; weak banks face failure

Real estate products accounted for 8.7% of all trust products in September, compared with about 30% in the same month the last two years, Reuters found.

As a result, China's shadow banking industry - worth about $3t, roughly the size of Britain's economy - is scrambling for new business, including direct investment in companies, family offices and asset management.

Once-well-paid employees are now leaving for other jobs after scavenging for new deals. One former shadow banking employee reportedly saw his pay plunge from $570,000 a year to just $34,000.

Read more from Reuters.

Follow the links for more news on

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

Funding freeze hits BNPLs
Investors are putting less cash towards BNPL providers, who already grapple with thin margins.
Bank-fintech alliance a win-win, says HSBC
Lenders can learn from disruptive tech whilst aiding its champions comply with regulations.