When Qinghong presided over the opening of Star City in Baodao, Li Guangyu and Yuan Tianfan came to Xiangjiang Bank together to attend the bank's emergency meeting. Also present were the major shareholders behind Xiangjiang Bank.
Although Li Guangyu and others had tightened their loans to the real estate industry as early as the beginning of 1982 and supervised the business that had already been loaned, they still could not avoid the emergence of some bad debts.
Small bad debts do not have much influence on banks, but large bad debts are where banks need to worry.
This time, Hong Kong Bank suffered a bad debt of 200 million Hong Kong dollars. The news has not spread yet, otherwise it would be a huge blow to the reputation of Hong Kong Bank.
Although with the strength of the shareholders behind Hong Kong Bank, 200 million Hong Kong dollars is not a big amount for them, but it has a considerable impact on customers.
In the conference room of Xiangjiang Bank, Feng Yubin, general manager of the banking business department, explained the situation of this business in detail to everyone present.
This business was loaned out in September 1981. The loan period was three years. It was loaned to Xinfa Real Estate Company. The controlling shareholder of this company is the Wang Guilin family.
Li Guangyu also knows something about this family. This is a medium-sized family in Xiangjiang. The family assets are about HK$500 million. Its main business used to be the textile industry, but in recent years it has been transferred to the real estate industry.
As the property market in Xiangjiang continues to rise, Xinfa Real Estate Company has continued to expand its scale, and its main business has also shifted to real estate. However, this property market crisis has dealt a heavy blow to them.
Moreover, their textile company did not move to areas with cheaper labor costs in advance. As a result, their business there was not very good and there was not much profit at all.
Now that there is such a big hole in the real estate company, the Wang family is unable to fill the hole. Currently, they have no choice but to bankrupt the real estate company.
This has put Xiangjiang Bank in a trap. They took out a loan in 1981. Xinfa Real Estate Company paid interest every month and will not return the principal until September next year. Now this company has chosen to go bankrupt and the bank wants to recover the loan.
But it’s difficult.
Li Guangyu and others could not do anything about this matter, and the Feng family could not be blamed for this matter. The Wang family had been old customers of Wing Hang Bank, the predecessor of Xiangjiang Bank, for decades, and had cooperated with Wing Hang Bank for many years. Under the circumstances at that time, everything
The procedures were reasonable and compliant, and the property market was still booming, so it was impossible not to give him a loan.
Li Guangyu said: "I believe this problem will not be an exception. Our major banks may also encounter it in the future. Especially now that the property market continues to decline, many real estate companies will not be able to sustain it. Our most important issue at the moment is
We should use this incident as a pilot to explore a method that can effectively reduce the losses of our bank and serve as a reference for us to deal with similar incidents in the future."
This is not only a problem faced by Hong Kong Bank, Bank of East Asia and Hong Kong Asian Commercial Bank will also face this problem. They also have many long-term customers. No one is sure at present whether some of the loans will become bad debts.
Especially the Bank of East Asia, which has been established for more than half a century, and some families have been cooperating with them for a very long time. It is very likely that their customers will be included in this wave of real estate bankruptcies. How to reduce losses in this crisis is very important.
It has become a problem that they urgently need to solve.
Zheng Yutong said: "The main problem now is that these companies lack liquidity and are also facing interest payments from banks. Coupled with the decline in the property market, their assets have also fallen, making them unable to fill this hole. To solve this problem
The problem, I think, is that one is that we take over the properties they develop, and the other is that the banks continue to provide them with blood transfusions so that they will not go bankrupt, so that we will not lose everything."
Regarding the two opinions proposed by Zheng Yutong, the second one was directly rejected. At this time, they do not need to continue to provide blood transfusions to these real estate companies to help them survive this crisis.
Since they have chosen to enter the real estate market in the hope of making a fortune, they must be prepared to lose money. In the end, they hope that their bank will support them without even thinking about it. If every large customer of their bank does this, their bank will
They will all be dragged down.
As for what Zheng Yutong said about taking over the deal, this issue still needs to be carefully discussed. They are obviously unwilling to take over the deal at the current price.
Lee Shau Kee said: "The more serious problem now is that only 80% of Xinfa Real Estate Company's shares are mortgaged in our bank, and the remaining 20% is in the hands of others. Even if we have to deal with Xinfa Real Estate Real Estate Company, it will not be easy to deal with it.
, this aspect also needs to be communicated with the bank.”
Li Guangyu is not worried about this. Even if the market value of Xinfa Real Estate Company has plummeted due to the collapse of the property market, its own properties are still worth about 150 million Hong Kong dollars. As for his company, don't think about it. Now the company's personnel
There are only a few, the funds are even more exhausted, and they are worthless at all.
If the bank takes over the property of this company, the loan of 200 million Hong Kong dollars will be returned in two years.
Li Guangyu said: "The bank will first talk to the Wang family to see if they choose to transfer the company out on their own, or if our bank will directly take it back. It would be better if they can repay the loan. If this is not possible, we can only temporarily
After taking over this company, let’s see who owns the other 20% shares and see what they think.”
Li Guobao has much more experience in this regard. Banks often have to take over companies because customers cannot repay their loans. However, banks usually strive to transfer the companies as soon as possible. They themselves will not operate these companies for a long time.
However, things are different here at Xiangjiang Bank. There are several real estate groups as shareholders behind them. If they take over Xinfa Real Estate Company, the bank will not need to worry about its operations. These shareholders have enough manpower to solve operational problems.
Now the consensus among the major shareholders is that it is impossible to continue the blood transfusion. If the Wang family is unable to repay the loan, Xiangjiang Bank will take over Xinfa Real Estate Company to prevent the bank from suffering huge losses.
This year is the most difficult year for the real estate industry in Xiangjiang. After these two years, the real estate market in Xiangjiang will gain strength again. The next crisis will not come again until the Asian financial crisis occurs. The glory of the past ten years is enough for their development.
At the meeting, Li Guangyu and others discussed the current property market issues again. They will definitely enter the market this year, but they still need to communicate with Li Guangyu about time so that they can have time to prepare.
Li Guangyu said: "I don't expect to officially enter the market until the end of this year. By that time, the property market is estimated to have almost reached its trough. It is a more suitable time for us to enter the market at the bottom. In this period of time, everyone can continue to explore overseas markets."
market and consolidate development there."
Since Li Guangyu said he would enter the market at the end of this year, they didn't ask any more questions. During this period of time, they were going to explore the Kuala Lumpur market, which was also one of the markets that their interest group focused on developing this year.
When Li Guangyu visits Southeast Asia this year, Zheng Yutong will also go to visit some areas. He is preparing to open his jewelry stores and hotels in these areas.