Exclusive | Bank of Jiangsu launches ABS funds as financing demand rises
The bank has raised two 20 billion yuan funds to specialise in securitised consumer and real estate loans.
Bank of Jiangsu, a mid-size lender in China, has raised a combined 40 billion yuan (US$5.8 billion) for two investment funds slated for the buoyant asset-backed securities (ABS) market, as mainland financial institutions increasingly resort to securitisation to expand their funding sources.
Gao Zengyin, head of the bank’s investment banking and asset management department, said more large ABS funds will be launched by the A-share listed lender to capitalise on the rising financing demand amid a potential cash squeeze on the country’s monetary market.
“The two funds are in the registration process,” Gao told the South China Morning Post. “They are prepared to invest in lucrative deals. We plan to launch more ABS funds after gauging the market demand.”
The two funds, each 20 billion yuan, will specialise in securitised consumer and real estate loans.
The bank teamed up with Tebon Securities to manage the fund focusing on securitised consumer loans while partnering with GoHigh Capital to operate a fund engaged in securitised investment products backed by real estate loans.
To date, they are the largest ABS funds on the mainland, where securitisation is growing on a fast track in line with Beijing’s efforts to de-leverage an economy saddled with increasing bad-loan risks.