Money

CITIC Bank to cut new property loans by a third

(Agencies)
Updated: 2011-05-04 16:42

China CITIC Bank, a second-tier Chinese lender, will cut property loan increase by at least a third in 2011 from last year, a bank executive said on Wednesday.

Related readings:  China may expand property curbs to more cities  CITIC Bank opens int'l branch in Singapore

Shi Yuan, a risk management executive at CITIC, said at a quarterly results briefing that the bank "strictly" controls lending to the property sector, indicating it is falling in line with the government's effort to cool exuberant house prices.

Wang Kang, a chief of planning and finance at CITIC, said the bank's outstanding loans to local government financing vehicles stood at 104.6 billion yuan ($16.1 billion) at the end of March.

Many investors regard property and local government bank loans as a threat to China's economic stability because they worry over-zealous lending in recent years could result in many of these loans not getting repaid.

China's major banks have so far played down these concerns by insisting that risks are under control.

CITIC, which is roughly 15-percent owned by Spain's BBVA , said last week that its first-quarter net profit jumped 51 percent from a year ago.