Hong Kong's Wing Lung Bank raises mortgage rate 0.25pc to 2.4pc
Wing Lung Bank raised its mortgage lending rate by 0.25 percentage point to 2.4 per cent per annum. The previous rate of 2.15 per cent will still be available to some customers, such as its private banking clients.
Wing Lung's move followed that of other major banks, which increased mortgage lending rates in March. Derek Chung Siu-kuen, assistant general manager and head of retail banking at the lender, said he expected the impact of the hike on the bank's mortgage business to be minimal. The new rate takes effect today.
Bank of China (Hong Kong), Hang Seng and Dah Sing recently started offering fixed-rate mortgages.
Data from the Hong Kong Monetary Authority showed that only 0.2 per cent of new mortgage lending volume was fixed-rate as of March.
"It is not worth Wing Lung's while to launch a product that is not very popular with customers," Chung said, adding that the lender had no plans to begin offering such a mortgage.
"To prevent head-to-head competition with other banks on mortgages, we aim to provide a one-stop shop for customers."
Chung said the margin on mortgages was so thin that the bank would put its resources into the unsecured lending business, such as personal loans and micro finance business, adding that such lending could earn the bank a higher rate of interest income.
Wing Lung plans to set up a team to specialise in personal loans, in order to increase the interest income the bank receives, Chung said.
To boost fee income, Chung said the bank would double the number of relationship managers it employed. He declined to say how many relationship managers the bank currently had. Wing Lung has 44 branches in the city. Chung said it plans to renovate them all over the next three years.