Banks seen holding back on mortgages

Some commercial banks suspended mortgage lending approval at the end of June as a result of temporary tight liquidity, with approvals expected to resume in July, media reports said Tuesday.

Home buyers have encountered difficulties in obtaining bank loans to fund their purchase of secondhand homes, as banks suspended review and approval of mortgage loans in the last week of June, Beijing Morning Post reported Tuesday, citing a home buyer.

Normal practice is expected to be resumed in July, the report said.

Preferential mortgage rates for first-home buyers were no longer available at some banks, Beijing News reported Tuesday, due to tight liquidity conditions for banks.

"It is relatively difficult to get a mortgage loan in some branches of Industrial and Commercial Bank of China (ICBC), Bank of China and Huaxia Bank," said Qiao Zhiyuan, a mortgage business manager at 515aj.com, a division of 5i5j.com, a major property broker.

How long it would take to get a loan from these banks is unknown, Qiao told the Global Times Tuesday, noting that he has not succeeded in helping Beijing customers to get mortgage loans from these banks since mid-June.

But Qiao said the tightening has only been noticeable at a few banks, with mortgage business not affected at most other banks.

Only a few branches of ICBC had tight liquidity, as they need to meet the government's loan-to-deposit ratio requirement, said Tong Baibin, a mortgage business manager at the finance division of Beijing Homelink Real Estate Brokerage.

Though ICBC still accepts mortgage applications, it takes longer now for the bank to grant a loan to individual home buyers, Tong told the Global Times Tuesday.

Tong said he got the information from ICBC staff when helping customers to get mortgage loans from the bank. It is expected that they will resume normal practice in July when the liquidity pinch eases.

Members of staff at Beijing-based ICBC, Huaxia Bank, China Construction Bank and China Merchants Bank all told the Global Times on Tuesday that they have not changed their policy in terms of granting mortgage loans.

Commercial banks have been suffering from tight liquidity recently as banks struggled to meet regulatory requirements at mid-year.

The central bank said Monday that there was enough cash in the banking system, and that it was up to banks to manage it and control lending better.