(Yicai Global) June 13 -- "Business as usual," say major banks in Shanghai, denying some online rumors that about 20 banks in China have stopped extending home loans. An investigation by China's state TV broadcaster, China Central Television (CCTV), found state-run major lenders in Shanghai continue their mortgage and credit loan operations as usual.
Some online reports recently claimed that about 20 out of the 553 banks in China have halted home loan businesses. However, banks in Shanghai have not stopped extending such loans and do carry out their normal business, the CCTV said after consulting a number of leading state-owned lenders in the city. They have not received a notice ordering them to stop issuing home loans, the Shanghai-based banking institutions said.
Mortgage rates on first homes were 4.73 percent on average in May, up 4.64 percent from a month ago and up 6.29 percent from a year ago, publicly available data show. Some banks have recently raised mortgage rates for first home buyers to curb housing loan growth, said some media reports.
Those institutions that have halted home loan business mainly involve smaller lenders such as China Resources Bank of Zhuhai Co., Bank of Guangzhou Co. and Ping An Bank Co., and are mostly sub-branches, some of which do not have home loans as their principal business, the CCTV reported.
"That smaller lenders have stopped extending loans is partly due to their tight liquidity and partly related to real estate transactions at the cities where they are located," said Yan Yuejin, an industry insider. "There is no tightening of property transactions in the market," he added.