2014-04-10

Small and Medium Banks in 70% of Chinese Cities Have Stopped Mortgage Lending

Not every bank has stopped lending, but 70% of cities have at least some banks that have halted mortgage lending.

The Chinese blame the taper as one of the causes—though it must be said that they have complete control over their monetary policy, but choose to link it closely with U.S. policy.

The report said: 70% of the city to stop small banks mortgage divisions
Recently, 360 released the latest mortgage finance data show that in the sample selected 35 cities, 25 cities have stopped lending phenomenon, accounting for more than 70%. Banks stopped lending, mainly to small and medium commercial banks based, such as: Ping An Bank , Minsheng Bank , Guangdong Development Bank, CITIC Bank , etc.. In the city stopped lending accounted for ranking, Changsha, Wuxi, Fuzhou among the top three cities. Financial 360 pointed out that since March, the risk for most banks consider abolishing preferential mortgage rates, real estate-related loan approval tighter. Mortgage rates continued to rise, mortgage shortage nationwide real estate market is evolving as a temporary "loss of blood." 8.5 interest rate discount has been completely eradicated in the country, banks ease lending, lending serious pressure, and the emergence of the phenomenon of bank lending to pick people. At the same time, stop the further spread of the phenomenon of the loan, in addition to some commercial banks to suspend lending, the state-owned banks have stopped lending in a semi-state, provident fund loans are tightened.

In this regard, industry experts believe the tight liquidity situation has not fully reversed in the overall funding tight, tight credit situation in the real estate industry is still difficult to change in the short term, but also face the impact of the property market in the capital increase .

Data show that since March, compared to February mortgages have tight no loose, 8.5% interest rate concessions in the country has disappeared; perform only 8.8% interest rate concessions in Beijing, a city; other cities to raise its benchmark interest rate basic or higher. More than 70% of the city appeared to stop lending. Which mortgage bank 15 in Changsha, stop lending banks 4, stop lending accounted for 26.7%. Wuxi 12 mortgage banks, three stop lending, stop lending accounted for 25%. Fuzhou, Wuhan, Beijing and other places to stop lending to 20%, 18.1%, 17.9% respectively.

In addition to stop lending, the lending bank can not only ease the pressure-prime lending is serious, there was a lot of new lending phenomenon, according to a loan manager, is now difficult to determine the length of time lenders generally have at least five months about.

Lending rates to the highest bidder. Reporters found that the bank provides for a "high interest rates are high priority." Rong pointed out that 360 individual banks require customers to raise mortgage interest rates in order to promote the progress of the approval, otherwise the system will automatically lower the interest rate at the back, the processing time can not be guaranteed, so that the lender "hard" Wait. Many lenders are even forced to have a variety of supplemental agreements signed or agreed to change the designated bank interest rates to get lenders.

In addition, the bank also pick one loan. Such as bank loans will give priority to entertain two suites, two suites of loans because interest rates go up higher; give priority to large customers total loans lenders; give priority to higher wages entertain clients. For users with bad credit, bank performance is more stringent, by lowering the amount of the borrower's loans, floating rate borrowers, or need a third-party guarantor or institutions, serious direct refused credit.

Meanwhile, instead of mortgage credit lending. At present, many banks have been quietly suspended the mortgage business, with credit to "substitute." Higher mortgage interest rates compared to credit loans, as banks for more stringent mortgage approval, to obtain higher yields, often "encourage" customers for mortgage credit lending curve solve funding problems. It is understood that commercial bank lending rates in credit ranging from 8-18%, many foreign firms is to reach 22% -24%.

"Even want to have to buy financial products loans." Who buyers said, when applying for home loans, due to higher loan amount, the bank requires first purchase financial products, will approve the loan.

It is worth noting that the continued tightening of mortgage policy, first home loan interest rates go up, fund stopped lending policies indirectly undermine the ability of buyers to pay.

Twenty-first century estate analyst Kouhai Long said, by the impact of rising prices and tightening mortgage, provident fund loans have been unable to meet the demand for loans, the proportion of commercial loans in monthly increments, grant loans increased longevity, the entire transaction cycle to increase , home improvement needs of some type can not be released.

The reason for tightening lending, CR IC Research Center Yangke Wei believes that prudent monetary policy and QE 3 exit, caused by the continued tightening of liquidity. Meanwhile, the emerging Internet banking and shadow banking supervision strengthened, resulting in the loss of banking system deposits, loan funds can be used to reduce the amount of tightening the main reason.

Agricultural Bank of China warns branches of loan risks
Agricultural Bank of China, the mainland's third-largest lender by market value, has warned its branches about credit risks from property lending, two sources said.

The bank circulated a letter saying price cuts at housing projects in some smaller mainland cities had caused panic in the property market, they said, adding that the letter encouraged branches to take steps to avoid credit risks but demanded no specific measures.

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