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ICBC says to tighten lending to property developers

BEIJING: Industrial and Commercial Bank of China (ICBC) said it will halt lending to property developers that are hoarding land and may even call back some loans, in a bid to guard against credit risks.

The world's biggest bank by market capitalisation also reiterated that it planned to increase lending in a reasonable and balanced manner for the rest of the year after lending roughly 110 billion yuan (RM55.48 billion) in January.

"The bank will strictly control the quality of new lending, strengthen the management of potential risks and ensure a stable quality of credit assets," ICBC said in an e-mailed statement on Feb 8.

ICBC said it would offer more loans to major projects already under construction, to companies in services and green energy sectors and to drive domestic consumption, and would avoid lending to sectors suffering from overcapacity.

Chinese banks lent 9.6 trillion yuan last year, flooding the economy with cash that has fuelled rampant property price rises.

After Beijing announced a slew of tightening measures in recent weeks, some market observers are worried that a potential correction in the real estate market in 2010 could saddle banks with a raft of bad loans. -- Reuters

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