BOCHK lowers rate for mortgages
Bank says lending rate to stay at reasonable level after cut aimed at checking drop in loans
Bank of China (Hong Kong), the city's biggest mortgage lender, has cut mortgage rates for some clients in an attempt to arrest the plunge in loan volume.
Its lowest rate is the Hong Kong interbank offered rate plus 1.9 percentage points.
The shelf rate would remain at Hibor plus 1.95 to 3.15 percentage points, a BOCHK spokeswoman said. However, wealth management clients, payroll account holders and some other preferential customers would be eligible for a lower rate.
"We decided to adjust the mortgage lending rate taking into consideration the market situation and our own business development," said chief executive He Guangbei after the bank's annual general meeting yesterday.
"The rate will be kept at a reasonable level."
After the reduction, the bank's rate is still higher than the reference level of the Hong Kong Monetary Authority, which has set the floor at Hibor plus 0.7 percentage point.
Meanwhile, the bank, the city's only yuan-clearing bank, expects Singapore and Taiwan to eat into the city's yuan trade but expects Hong Kong to maintain its leading position in offshore yuan business.
HSBC and Standard Chartered issued yuan bonds in Singapore on Monday, the same day the Industrial and Commercial Bank of China started its yuan-clearing business there.
He told shareholders Hong Kong was still the No1 in yuan-clearing services.
"More than 70 per cent of cross-border yuan trade is cleared in the city at our bank. Singapore has just started yuan-clearing but Hong Kong has a longer history and experience in it. Another strength of Hong Kong is that we have plenty of yuan deposits, which generates the liquidity," he said.
Deputy chief executive Jason Yeung Chi-wai said the bank would continue to have the biggest branch network among its rivals but might adjust the location and the number of branches in accordance with population and business activity. It has more than 200 branches.