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Ping An, Minsheng may exit home loans

Shanghai Daily, February 27, 2013

• China's Ping An Bank and China Minsheng Banking Corp may exit the housing loan business due to a change in strategy, sources told Shanghai Daily Tuesday.

  "Ping An and Minsheng may withdraw from personal mortgages and stick to corporate loans to earn better profit margins," a banking source said. "It's partly due to the pressure from capital adequacy requirement."

  The Chinese banking regulator has set requirements in areas such as capital adequacy and leverage above the Basel III minimum to reflect the characteristics of the domestic market. Basel III, crafted by the Basel Committee on Banking Supervision, essentially require banks to hold more capital as a risk cushion against bad times.

  "It makes sense that the banks want to use their resources, the capital, for the most profitable business," the source added.

  Shenzhen-based lender Ping An Bank said in an e-mailed statement yesterday that "the credit resources will be slanted toward small and micro businesses, unsecured loans, and auto financing in 2013."

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