Citibank, fearing further falls in home prices, says it has no plans to follow the lead of Citic Ka Wah Bank, which is providing a mortgage refinancing scheme with lending of up to 140 per cent of a property's value.
Citic Ka Wah launched the scheme to help home-owners caught in negative equity - where a property is worth less than the borrowings on it.
Citibank territory business manager Danny Liu said the bank had decided to reduce its exposure on mortgage lending about 18 months ago in view of the depressed property market.
'We will not change our policy unless we see a full recovery of the property market,' he said. 'We prefer to wait until the property market becomes stabilised instead of joining the bandwagon to compete for business.'
Despite borrowers trapped in negative equity accounting for up to 20 per cent of the bank's outstanding loan portfolio, he said the delinquency rate - measured by the amount overdue for three months as a percentage of total lendings - was not serious.
The bank had been adopting a prudent mortgage lending attitude, Mr Liu said. Buyers could secure only up to 50 per cent of a flat's price when they applied for a home loan.