China’s Bank of Communications Co Ltd (BoCom) is reportedly planning an internal meeting to discuss potential changes to the rates charged on existing mortgages. The financial media outlet 21jingji.com has reported that the meeting is scheduled for Wednesday. This move comes in response to recent guidance from the central bank urging commercial banks to cut interest rates on existing mortgages.
In light of the central bank’s announcement earlier this month, Chinese lenders are widely anticipated to reduce interest rates on existing mortgages. The news has already had an impact on the market, with Hong Kong’s Hang Seng Mainland Properties Index experiencing a roughly 6% increase following the 21jingji.com report.
According to the report, various departments within BoCom, including corporate finance and personal finance, are expected to attend the meeting. The purpose of the meeting is to initiate a project aimed at adjusting the current mortgage rates. The details of this plan, however, were not disclosed in the report.
As of now, BoCom, which ranks as China’s sixth-largest lender by assets, has not provided an official response to media inquiries seeking clarification on the matter.
This development marks the first instance of a major state bank taking steps to implement changes in the pricing of existing mortgages. The central bank’s proposal to lower rates comes on the heels of increased early repayment of mortgage debt. The aim of this move is to alleviate the financial burden on potential homebuyers while also stimulating consumption.
