Agricultural Bank of China (中國農民銀行) yesterday said it has temporarily suspended property market loans to counter a surge in real-estate lending, but insisted the country’s property sector was “healthy.”
AgBank stopped giving mortgages between Aug. 24 and Aug. 31 “to ensure an even distribution of loans and to avoid a surge at the end of the month,” AgBank vice chairman Zhang Yun said.
“But [AgBank] has no intention to stop loans to the property market,” he told a press conference in Hong Kong to discus the company’s first-half financial results. “It is a temporary measure taken by [AgBank] according to its own needs.”
Chairman Xiang Junbo (項俊波) said government policy measures to cool overheating in China’s real estate market would help prevent “drastic fluctuations,” adding that the Chinese property sector is “developing and healthy.”
AgBank has the lowest property loan balance among its rival lenders, Xiang said.
On Friday, AgBank — which this month claimed title to the world’s biggest initial public offering in a US$22.1 billion sale — said that profit in the first six months rose 40.2 percent to 45.86 billion yuan (US$6.74 billion), from 32.71 billion yuan last year.
AgBank shares fell 0.8 percent to HK$3.51 (US$0.45) in morning trading on the Hong Kong stock exchange yesterday.
Xiang credited growth in the company’s rural lending business and lower bad-loan rates for the rosy half-year figures, but critics have speculated that AgBank’s rural-lending mandate would dent its performance as a public company.
In recent months, Chinese authorities have tightened restrictions nationwide on advance sales of new developments, introduced curbs on loans for third home purchases and raised minimum down-payments for second homes.
Property prices last month rose at a slower pace, suggesting policy measures to cool the sector may be having an impact.
Last week, the Wall Street Journal reported that two of China’s biggest state-run banks — Bank of China and China Construction Bank — have cut back lending to local government investment vehicles whose borrowing has raised concerns over a bad-loan crisis.
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