Chinese banks still lending to developers

China’s largest banks have not stopped making new loans to property developers but are keeping such loans at low levels, executives from some of the lenders said yesterday to refute a report in a state-run newspaper.

Chinese banks have been facing additional scrutiny over loans to the property sector because existing government measures have had a limited impact on cooling the overheated domestic real-estate market and Beijing is turning to lending curbs to rein in surging property prices.

The Industrial and Commercial Bank of China said yesterday it has not stopped issuing new loans to developers.

“There’s no such thing,” said ICBC deputy director Xie Taifeng. He was responding to a China Real Estate Business report yesterday that said the country’s four largest state-owned banks had stopped making property loans since the end of last month and will not issue any such loans for the remainder of this year.

A China Construction Bank spokesman said he has not heard about the reported halt in lending, while a spokesman for the Agricultural Bank of China said he was unaware of the situation.

But a Bank of China official familiar with the matter told Dow Jones Newswires the lender recently reached its quota for loans this year to property developers.

“If you apply for the loan now, it will take at least two to three months to get the loan,” said the official.

China’s central bank said last month outstanding loans to the property sector were up 32.9 per cent at the end of September from a year earlier. New yuan loans to the sector during the January to September period totalled 1.72 trillion yuan ($338 billion).

Source : Today – 16 Nov 2010

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