Beijing Bank disposes of real estate non-performing loans involving R&F and Tahoe

To actively promote the resolution of non-performing assets, Beijing Bank Co., Ltd. (referred to as “Beijing Bank,” 601169.SH) has increased its disposal of real estate non-performing loans.

Recently, according to YinDengWang information, Beijing Bank’s Shanghai branch listed for transfer a non-performing loan of Shanghai Zhonghong Real Estate Development Co., Ltd. (referred to as “Zhonghong Real Estate”) through a single corporate transfer, involving a total claim of approximately 930 million yuan. The principal of this debt is about 799 million yuan, with interest of 131 million yuan and fees of 287,800 yuan. In Beijing Bank’s five-category classification of loans, it has been designated as substandard, categorizing it as a non-performing loan.

The borrower, Zhonghong Real Estate, is a wholly owned subsidiary of Fuli Properties (02777.HK), a listed real estate company headquartered in Guangzhou. It is mainly responsible for the development and operation of the Shanghai Fuli Global Center, a commercial complex located in the Hongqiao Business District of Shanghai. The project has a total construction area of nearly 270,000 square meters, including five Grade A office buildings and two high-end hotels. Most of the project has been completed and some office buildings have been sold.

Due to the prominent drawbacks of the “high leverage, high debt” development model in previous years, Fuli Properties has fallen into difficulties in recent years. As of the end of June 2025, the company’s total liabilities reached 264.379 billion yuan, with only 688 million yuan in cash and cash equivalents, and a net loss attributable to the parent of 4.046 billion yuan in the first half of the year. Under this cash flow and operational situation, Fuli Properties is unlikely to repay its loans in the short term.

As collateral for this loan, the Shanghai Fuli Global Center project still holds certain asset value. The project is located near the Shanghai Hongqiao Transportation Hub, offering convenient transportation. In addition to office buildings and hotels, there is about 30,000 square meters of commercial complex, and some enterprises have already moved into the park.

Industry insiders believe that, although the borrower, Fuli Properties, is unable to repay, the collateral still has value. Beijing Bank’s decision to dispose of this non-performing debt through public listing and transfer reflects the bank’s proactive effort to clear non-performing assets. If the transfer is successfully completed, it may also recover a certain proportion of cash, reducing losses on non-performing assets.

Beijing Bank stated in its mid-2025 report that it will adhere to prioritizing cash collection, strive to improve the cash recovery ratio, and comprehensively utilize various disposal methods to resolve non-performing assets in an orderly manner.

In addition to the recent transfer of the Fuli Properties-related debt, Beijing Bank has also recently transferred a debt involving another real estate company, Tahoe Group. In December 2025, Beijing Bank listed a debt asset related to Tahoe Group. The transfer announcement showed that as of April 21, 2025, the debt amount was about 2.211 billion yuan, including principal of approximately 992 million yuan, with interest, late fees, and compound interest reaching 1.219 billion yuan, and other fees of 770,000 yuan.

The success of these two non-performing real estate-related debts being transferred remains uncertain. An industry insider told reporters that the real estate sector is still in a stabilization phase. Whether the collateral is a commercial complex or residential property, its value has significantly declined from its peak. In today’s buyer’s market, without sufficient discounts, it is not easy to successfully transfer real estate assets.

Beijing Bank still maintains a certain scale of real estate loans. Its mid-2025 report disclosed that as of the end of June 2025, the bank’s principal on real estate loans was 124.494 billion yuan, accounting for 5.21% of its total loans.

In terms of operations, Beijing Bank has faced some pressure in recent years to grow revenue. According to its third-quarter 2025 report, as of the end of Q3 2025, the bank achieved operating income of 51.588 billion yuan, a decrease of 1.08% year-on-year, and net profit attributable to the parent of 21.064 billion yuan, up 0.26% year-on-year. From the third quarter performance, both revenue and profit declined, with revenue at 15.37 billion yuan, down 5.71% year-on-year, and net profit at 6.011 billion yuan, down 1.85% year-on-year.

Additionally, regarding asset quality, as of the end of Q3 2025, Beijing Bank’s non-performing loan ratio was 1.29%, a decrease of 0.02 percentage points from the end of 2024. Its loan loss provision coverage ratio was 195.79%, also slightly lower than at the end of 2024.