Inflation tops banks' worries
By Zhang Fengming |
May 20, 2010, Thursday
|
Print Edition
Print Edition
BANKS in Shanghai are more concerned about inflation and the uncertainties in the real estate market, according to an industry-wide survey yesterday.
Inflation is the No. 1 concern for banks in Shanghai, followed by the growth of fixed assets investment, said the Shanghai Bureau of the China Banking Regulatory Commission, yesterday, quoting a survey it conducted on 184 bankers in the city in the first quarter of the year.
China's Consumer Price Index, the main gauge of inflation, rose 2.8 percent in March. The National Development and Reform Commission, the country's top economic planner, expects inflation in May and June to rise about 3 percent, a level that may trigger a hike in interest rates. China has kept its key rate flat since 2009.
More banks said they saw the real estate market to "slump" or "slow down" in 2010 and fewer of them expected the market to rise, the survey said.
The State Council, China's Cabinet, said banks can halt mortgages for third homes in places where housing prices rise too rapidly or too high. Banks are also ordered to increase interest rates by at least 10 percent and raise down payment to 50 percent on second homes.
Several lenders, including HSBC, Standard Chartered and DBS, have already held back their third-home mortgage business.
However, banks are more optimistic about their profitability this year with more than 60 percent of them saying their net earnings are expected to improve in the latter part of this year.
China's official monetary policy is still "relatively easing" but tightening measures, including issuance of central-bank bills, have already been rolled out this year to avoid overheating in the economy and curb the red-hot housing market.
China's economy expanded 11.9 percent in the first quarter of this year.
Inflation is the No. 1 concern for banks in Shanghai, followed by the growth of fixed assets investment, said the Shanghai Bureau of the China Banking Regulatory Commission, yesterday, quoting a survey it conducted on 184 bankers in the city in the first quarter of the year.
China's Consumer Price Index, the main gauge of inflation, rose 2.8 percent in March. The National Development and Reform Commission, the country's top economic planner, expects inflation in May and June to rise about 3 percent, a level that may trigger a hike in interest rates. China has kept its key rate flat since 2009.
More banks said they saw the real estate market to "slump" or "slow down" in 2010 and fewer of them expected the market to rise, the survey said.
The State Council, China's Cabinet, said banks can halt mortgages for third homes in places where housing prices rise too rapidly or too high. Banks are also ordered to increase interest rates by at least 10 percent and raise down payment to 50 percent on second homes.
Several lenders, including HSBC, Standard Chartered and DBS, have already held back their third-home mortgage business.
However, banks are more optimistic about their profitability this year with more than 60 percent of them saying their net earnings are expected to improve in the latter part of this year.
China's official monetary policy is still "relatively easing" but tightening measures, including issuance of central-bank bills, have already been rolled out this year to avoid overheating in the economy and curb the red-hot housing market.
China's economy expanded 11.9 percent in the first quarter of this year.
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