THE impressive interim profit growth of Union Bank was largely due to an improved mortgage lending environment, especially following the big banks' trimming of mortgage exposure, says the bank's managing director David Yau.
Big banks such as Hongkong Bank and Standard Chartered have tightened home mortgage credit policy in the face of spiralling property prices, leaving smaller banks with more applicants.
''Due to this spillover effect, we did have had more customers coming to us for mortgage loans in the first half,'' he said.
While admitting that second-tier banks benefited from the ''credit squeeze'' by big banks in the mortgage loan market, he emphasised that it did not imply higher risk for the bank.
What it did mean was that smaller banks were given more choices and could be more selective in granting loans.
''Big banks adhere to strict credit policy because of their enormous size and the need for policy conformity,'' Mr Yau said. ''At smaller banks, we allow more flexibility.'' For instance, one requirement for a mortgage loan was a copy of a tax bill.
