25-11-2014, 10:36 PM
Bank of China aims to double Australian mortgage lending
PUBLISHED: 25 NOV 2014 11:42:42 | UPDATED: 25 NOV 2014 12:59:08
Bank of China plans to double its mortgage lending in Australia in two years
Bank of China plans to double its mortgage lending in Australia in two years and wants to offer more home loans to locals, the bank’s country head said.
There is demand for dwellings from Australians of Chinese origin and investors from the mainland, Shanjun Hu said in an interview last week in Sydney. Bank of China hopes to reach more non-Chinese borrowers in the country through a product distribution agreement with Australian Finance Group, the nation’s biggest mortgage broker, he said.
“I think more and more also the local Australians will be our customers,” Hu said. Australia’s market “needs the capital, the investment from outside,” he said.
Bank of China is seeking a bigger slice of a $1.4 trillion mortgage market that’s almost 80 percent controlled by Commonwealth Bank of Australia and its three largest rivals. Chinese buyers overtook Americans to become the biggest foreign acquirers of Australian real estate in the 12 months through June 2013, government data showed.
Lawmakers are probing foreign property ownership and the central bank has signaled concern about prices even as it holds its cash target at a record low of 2.5 percent. Residential property prices across the nation’s capital cities climbed 8.9 percent in the year to October, according to figures from information provider CoreLogic.
CHINESE BROKERS
Bank of China, the fourth-largest Chinese lender by market value, held $672 million of Australian mortgages as of September 30, according to Australian Prudential Regulation Authority data. That’s up 13 per cent from a year earlier, about twice the pace of growth for the Australian home-loan market as a whole.
“In the coming two years, I hope that we can double the amount” of mortgages that Bank of China currently has, Hu said.
Commonwealth Bank, Australia & New Zealand Banking, National Australia Bank and Westpac Banking held $1.08 trillion in mortgages at the end of September, APRA data show.
Bank of China’s mortgage customers include people of Chinese origin who come to the bank through Chinese brokers based in Australia, Hu said. It has nine branches across four cities and about 300 employees in Australia, he said.
AFG, which signed an agreement with Bank of China on October 28, is a mortgage-aggregating group with more than 2,100 brokers across Australia and which processes more than A$4.5 billion of financing a month, according to its website.
The company, based in Perth, is planning to offer Bank of China products initially through about 30 brokers in the state of New South Wales before expanding into other regions, said Mark Hewitt, AFG’s general manager of sales and operations. The first mortgage applications are likely to begin coming through within the next week or so, he said by phone yesterday.
NATURAL FIT
“Probably about 25 per cent of the business we generate in New South Wales is for either people of Chinese origin or overseas Chinese investors, so there’s just a natural fit there with Bank of China,” said Hewitt, noting that the agreement between the two companies represented an opportunity for the Beijing-based lender to expand beyond its traditional base.
Bank of China has also lent out $9.7 billion to corporate customers as of September 30, up from $7.4 billion a year earlier, according to APRA data. It plans to provide bridge loans and enter agriculture, food and infrastructure financing, Hu said. It currently offers clients syndicated loans as well as project and trade finance.
Total loan volumes from Chinese banks have exploded since the global financial crisis, rising to more than A$15 billion as of Sept. 30 from less than A$500 million in April 2008, APRA data show. Economic ties have deepened between the two nations over recent years, with Australia ramping up mining exports, China emerging as its largest commercial partner and the two nations agreeing to a free trade deal.
“We are very optimistic for the coming years,” Hu said. “We are ready to provide more services here.”
Bloomberg
PUBLISHED: 25 NOV 2014 11:42:42 | UPDATED: 25 NOV 2014 12:59:08
Bank of China plans to double its mortgage lending in Australia in two years
Bank of China plans to double its mortgage lending in Australia in two years and wants to offer more home loans to locals, the bank’s country head said.
There is demand for dwellings from Australians of Chinese origin and investors from the mainland, Shanjun Hu said in an interview last week in Sydney. Bank of China hopes to reach more non-Chinese borrowers in the country through a product distribution agreement with Australian Finance Group, the nation’s biggest mortgage broker, he said.
“I think more and more also the local Australians will be our customers,” Hu said. Australia’s market “needs the capital, the investment from outside,” he said.
Bank of China is seeking a bigger slice of a $1.4 trillion mortgage market that’s almost 80 percent controlled by Commonwealth Bank of Australia and its three largest rivals. Chinese buyers overtook Americans to become the biggest foreign acquirers of Australian real estate in the 12 months through June 2013, government data showed.
Lawmakers are probing foreign property ownership and the central bank has signaled concern about prices even as it holds its cash target at a record low of 2.5 percent. Residential property prices across the nation’s capital cities climbed 8.9 percent in the year to October, according to figures from information provider CoreLogic.
CHINESE BROKERS
Bank of China, the fourth-largest Chinese lender by market value, held $672 million of Australian mortgages as of September 30, according to Australian Prudential Regulation Authority data. That’s up 13 per cent from a year earlier, about twice the pace of growth for the Australian home-loan market as a whole.
“In the coming two years, I hope that we can double the amount” of mortgages that Bank of China currently has, Hu said.
Commonwealth Bank, Australia & New Zealand Banking, National Australia Bank and Westpac Banking held $1.08 trillion in mortgages at the end of September, APRA data show.
Bank of China’s mortgage customers include people of Chinese origin who come to the bank through Chinese brokers based in Australia, Hu said. It has nine branches across four cities and about 300 employees in Australia, he said.
AFG, which signed an agreement with Bank of China on October 28, is a mortgage-aggregating group with more than 2,100 brokers across Australia and which processes more than A$4.5 billion of financing a month, according to its website.
The company, based in Perth, is planning to offer Bank of China products initially through about 30 brokers in the state of New South Wales before expanding into other regions, said Mark Hewitt, AFG’s general manager of sales and operations. The first mortgage applications are likely to begin coming through within the next week or so, he said by phone yesterday.
NATURAL FIT
“Probably about 25 per cent of the business we generate in New South Wales is for either people of Chinese origin or overseas Chinese investors, so there’s just a natural fit there with Bank of China,” said Hewitt, noting that the agreement between the two companies represented an opportunity for the Beijing-based lender to expand beyond its traditional base.
Bank of China has also lent out $9.7 billion to corporate customers as of September 30, up from $7.4 billion a year earlier, according to APRA data. It plans to provide bridge loans and enter agriculture, food and infrastructure financing, Hu said. It currently offers clients syndicated loans as well as project and trade finance.
Total loan volumes from Chinese banks have exploded since the global financial crisis, rising to more than A$15 billion as of Sept. 30 from less than A$500 million in April 2008, APRA data show. Economic ties have deepened between the two nations over recent years, with Australia ramping up mining exports, China emerging as its largest commercial partner and the two nations agreeing to a free trade deal.
“We are very optimistic for the coming years,” Hu said. “We are ready to provide more services here.”
Bloomberg