Date
17 December 2017
HKMA's Arthur Yuen has urged banks to review their mortgage portfolios in order to curb risks. Photo: HKEJ
HKMA's Arthur Yuen has urged banks to review their mortgage portfolios in order to curb risks. Photo: HKEJ

HKMA takes stronger stance on bank mortgage reviews

The Hong Kong Monetary Authority (HKMA) is urging lenders to review their mortgage portfolios to ensure that none of their clients have taken second mortgages.

Calling for stronger risk controls, HKMA deputy chief executive Arthur Yuen Kwok-hang said banks can decide on rolling out either a full or partial review.

Doing nothing is not an option, the Hong Kong Economic Journal quoted him as saying.

Counter-risk measures such as requiring more guarantees, charging a higher lending rate or lowering the mortgage amount should be taken if any second mortgage is uncovered, Yuen added.

The remarks suggest that the city’s de facto central bank is adopting a more stringent stance now, compared to the recent past.

In March Yuen, in an article published on the HKMA website, had merely said that lenders are encouraged to regularly examine samples of their mortgage portfolios.

The latest call for review is aimed at preventing banks from taking excessive risks in the home mortgage market.

As of the end of April, there was HK$1.02 trillion in mortgages outstanding in the city, up 0.7 percent from a month ago.

Newly approved value meanwhile was down 18.9 percent month-on-month to HK$22.8 billion in April.

Translation by Vey Wong

[Chinese version]

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