Banking News
- Foreign banks offer new mortgage loans to compete
Date: 23-Jul-2007 Sources: (Xinhua Online)
BEIJING, July 23 -- Overseas banks are gearing up to snatch a bigger share of the individual mortgage market from domestic rivals.
Citibank in July launched its home refinancing program in Shanghai to target home buyers who want to make better use of their assets as the city's property prices rise. It's the first offering of its kind by an overseas bank in China.
'The purchase of property is a significant decision and the product is designed to provide our customers with greater financial flexibility and additional working cash flow,' said Anand Selva, executive vice president of Citibank (China) Co.
Citibank's launch of the products also coincided with rising second-hand property prices in Shanghai.
The average price for used apartments climbed again in June and so did the transaction volume, said Website www.ehomeday.com, which compiles a monthly index. That jumped 4.16 percent to 1,751 in June. The index baseline of 1,000 reflected the average price for used apartments in Shanghai in 2004.
Mortgage loans also grew in June. Domestic lenders increased their mortgages by 4.55 billion yuan, up 3.69 billion yuan from May.
Rising property prices means home owners can refinance their property on a higher valuation.
Citibank is waiving commission, insurance, property valuation fees and legal fees until the end of August on yuan-backed mortgage products to draw clients.
Home buyers can cut fees worth 11,250 yuan (US$1,486) on a mortgage valued at one million yuan during the period, the lender said.
Overseas rivals like Standard Chartered Bank, HSBC and Bank of East Asia also launched mortgage products soon after their local incorporation in April.
HSBC offers four payment options and three currency types for home buyers to cater to the needs of different clients. BEA offers a mortgage up to 80 percent of the property's value, the highest among the four overseas banks.
Analysts note that overseas banks' market share is still limited, as they were only allowed to solicit Chinese clients in the second quarter of this year.
'While overseas banks are going all out in the market, it is still hard for overseas banks to penetrate the market on the strong base made by domestic lenders,' said Qiu Zhicheng, a Haitong Securities Co analyst.
Some property developers have teamed up with local and overseas lenders to offer housing loans.
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