Tue, Nov 16, 2010 - Page 11 News List

Chinese banks deny report on halting developer loans

Bloomberg

Two of China’s biggest lenders — the Industrial and Commercial Bank of China Ltd (ICBC, 中國工商銀行) and China Construction Bank Corp (中國建設銀行) — yesterday denied a media report that they had suspended new loans to property developers for the rest of the year.

“There is no such thing,” Xie Taifeng, a Beijing-based press officer at ICBC, also the world’s biggest bank by market value, said by telephone.

A Construction Bank press official, who declined to be named, citing company policy, also said the report was untrue.

ICBC, Construction Bank, Bank of China Ltd (中國銀行) and Agricultural Bank of China Ltd (中國農業銀行) suspended developer loans because they had met their allotted loan targets for the year, according to a copy of a report e-mailed to Bloomberg News by state-run China Real Estate Business on Sunday.

New local currency loans reached 587.7 billion yuan (US$89 billion) last month, higher than the median 450 billion yuan forecast in a Bloomberg News survey of 25 economists.

ICBC shares rose 6.8 percent to 5 yuan in Shanghai trading, reversing an earlier drop of as much as 4.3 percent. Construction Bank closed 2.6 percent lower, paring a 7 percent slump. Bank of China rose 1.8 percent, while Agricultural Bank increased 1.1 percent.

Luo Nan, head of investor relations for Bank of China, and Ding Yuan, head of Agricultural Bank’s news division, couldn’t be reached for comment.

China’s property prices rose at the slowest pace in 10 months last month after the government raised interest rates and expanded measures to limit the risk of asset bubbles.

The central bank raised interest rates last month for the first time in three years and increased lenders’ reserve requirements as cash from last month’s larger-than-forecast US$27.1 billion trade surplus threatened to add to the risk of asset bubbles and accelerating inflation.

Bi Jianling, spokeswoman for the Ministry of Housing and Urban-rural Development, which operates the newspaper, said yesterday that she couldn’t confirm the report.

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