The Industrial and Commercial Bank of China (ICBC), the country's largest commercial bank, announced yesterday that outstanding individual housing loans stood at 104.8 billion yuan (US$12.6 billion) by the end of last year, more than double the previous year's 41 billion yuan (US$4.9 billion).
The proportion of individual housing loans in the bank's total amount of outstanding loans has soared from 0.2 percent in 1997 to 4.5 percent last year, ICBC Vice-President Li Lihui said yesterday at a press conference.
The bank has become the second state-owned commercial bank to have over 100 billion yuan (US$12 billion) in outstanding individual housing loans, after the China Construction Bank.
China's state-owned commercial banks have made great progress in readjusting their credit structures and improving asset qualities by putting individual housing loans at the top of their credit lists, officials said.
Another two state-owned commercial banks in China, Agricultural Bank of China and Bank of China, are making efforts in developing commercial housing loan businesses because of its great market potential, bank officials said.
"The fast strides of individual housing credit is significant for ICBC in readjusting its monotonous credit structure and improving credit quality," said Li.
As a state-owned commercial bank born under the planned economy, ICBC had been focusing for years on enterprise clients. By the end of 1997, corporate loans made up over 99 percent of its total loans, whereas high-quality consumer credit had been relatively ignored.
As housing sector became a growth sector in China in 1997, ICBC began to shift its loan focus from enterprise clients to housing credit, in particular to individual borrowers, said Li.
"Individual housing loans usually maintain a higher quality than other loans as management methods in this field are clear and standardized and individual customer's credit awareness is stronger than enterprise clients."
So far, the non-performing rate of ICBC's individual housing loans stands below 0.5 per cent. Individual housing credit has become the bank's least dangerous and most profitable credit asset.
Providing China builds over 500 million square metres of urban housing every year by 2010, ICBC will continue to expand its individual housing credit assets into the future, he said.
This year, the bank will grant 100 billion yuan (US$12 billion) of individual housing loans, and in the next five years, it plans to give out a total of 500 billion yuan (US$60 billion) of such loans.
(China Daily 01/09/2001)
