Banks look to boost mortgage loans
(Shanghai Daily)
Updated: 2006-07-03 13:48
Chinese banks have stepped up efforts to boost synergy while striving to
reinvigorate the sagging mortgage loan business in order to meet tougher
competition.
The moves come at a time when a raft of Chinese mainland lenders are listing
overseas to bolster profits and improve efficiency before the sector fully opens
to foreign players late this year, analysts said.
The Shandong and Gansu branches of China Construction Bank said last month
they would slash deposit rates on small-denomination demand saving accounts from
0.72 percent to 0.01 percent.
Each account with a balance of less than 300 yuan (US$37.5) will be paid the
new rate while the branches will also charge account holders a management fee of
3 yuan each quarter.
Under the rules on China's mainland, commercial lenders are assigned upper
limits on interest rates by the central bank, but gives banks the flexibility to
set the low end.
Usually Chinese banks provided the maximum allowable interest, hoping to
obtain abundant capital for lending to companies. But things might change as the
country's household savings hit a record US$1.9 trillion and the government has
moved to curb an investment boom, analysts said.
"Banks are not as desperate as before to seek growth through deposits," said
Wu Ke, a Zhongtian Investment Consulting Co. "Costs are one concern and lenders
decided to move on that aspect."
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