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Peggy Sito

Industrial and Commercial Bank of China (ICBC) plans to raise its outstanding individual mortgage loans to between 550 billion yuan (about HK$515 billion) and 600 billion yuan by 2005, according to chairman and president Jiang Jianqing.

'By that time, the number of our individual mortgage loan clients will increase to more than five million,' Mr Jiang said.

ICBC, the mainland's largest commercial bank, has more than one million individual mortgage loan clients.

According to the Economic Daily,  ICBC had outstanding individual mortgage loans of 130 billion yuan by the middle of this month.

They accounted for about 5.5 per cent of the bank's overall loans.

In 1997, the ratio was only 0.2 per cent.

The paper said the bank aimed to boost its outstanding individual mortgage loans to 15 per cent of overall loans by 2005.

The plan to boost home lending also aims to take advantage of the country's strategy to encourage private home ownership.

China is shifting from a system of housing allocated by the government or employer to one in which people buy their homes, although some will receive state subsidies.

The bank planned to boost mortgage lending by 80 billion yuan this year, officials have said.

ICBC's outstanding mortgage loans at the end of last year were 104.8 billion.

To cope with the expansion, Mr Jiang said the role of management would be very important.

'By [2005], the number of our targeted individual mortgage loan clients will be close to Hong Kong's existing population,' he said.

To this end, having good management would be vital, he said.

Earlier this month, the People's Bank of China banned commercial banks from making mortgage loans without requiring a down-payment in a move to cool competition among banks.

Mortgage lending is a key part of consumer lending by banks, and one of the country's high growth potential segments.

Consumer lending was minimal in ICBC's loan book two or three years ago, but it now accounted for 4.5 per cent of the book.

ICBC and the three other big state-owned banks - Bank of China, China Construction Bank and Bank of Agriculture - are strengthening their capacity to compete with foreign competition after China's entry to the World Trade Organisation.

Mr Jiang said the bank was also expanding its market share in the commercial notes market, predicting that transaction volume in this sector would be worth more than 300 billion yuan.



Five million customers seen by 2005