Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

HSBC, StanChart halt new mortgages to two HK projects by Evergrande, brokers say

Stock MarketsJul 22, 2021 04:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018. Picture taken March 26, 2018. REUTERS/Bobby Yip/File Photo

HONG KONG (Reuters) -HSBC and Standard Chartered (LON:STAN) are declining to extend new loans to buyers of property in two uncompleted Hong Kong residential projects developed by China's Evergrande Group, three mortgage brokers said on Wednesday.

One of the brokers told Reuters that Bank of East Asia had taken a similar step.

The move by the banks emerged after a Chinese court froze a $20 million bank deposit held by Evergrande this week and a Chinese city regulator briefly suspended sales from two of its projects.

The three brokers said the banks had halted lending to two residential projects in Hong Kong that were scheduled for completion in August and October, but they said the banks were still lending for a third, completed Evergrande development.

More banks may follow suit, they added.

HSBC declined to comment while Standard Chartered did not respond to request for comment. Bank of East Asia said late Wednesday that approved applications will not be affected, and it is continuing to accept applications for loans where the funds are handed to the buyers once the flats are completed.

Evergrande said other banks were still approving mortgages for its off-plan units. It said it expected any decision by Hong Kong banks, which it did not name, to halt lending to have only a minor impact. It said its developments were on schedule.

Ivy Wong, managing director of Centaline Mortgage Broker, said that, from a bank's perspective, "a mortgage for pre-sold developments is a loan without the collateral of a completed property, so the risk is higher."

Mortgage brokers said only a small number of buyers had been affected as many applications for the two uncompleted projects had previously been approved.

They said prospective buyers could also seek to change payment arrangements with Evergrande to make a purchase after completion.

Eric Tso, senior vice president of Mreferral, said many buyers whose applications were rejected had initially sought to borrow directly from Evergrande, which has in the past offered mortgages of up to 90% of the purchase value.

"But now Evergrande's not extending mortgages anymore," Tso said, adding that banks would typically not offer a mortgage with a loan-to-property value ratio of 90%.

Evergrande did not comment on whether it was still offering mortgages.

HSBC, StanChart halt new mortgages to two HK projects by Evergrande, brokers say
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email