Banking

Some bank outlets in Shanghai have suspended mortgage loans to home buyers, the China Securities Journal reported Thursday.

An anonymous developer said, the Shanghai outlets of the China Industrial and Commercial Bank, the Agricultural Bank of China, the China Minsheng Banking Corp Ltd and the Industrial Bank Co Ltd all suspended issuing loans. "Banks do want to lend, but they may have no money for lending" the developer said.

China has raised the reserve ratios for banks nine times since last year, and 3 trillion yuan of banks' capital has been frozen as a result.

Sources with the above mentioned banks said they have not stopped mortgage loans, but have more strict requirements for granting these loans.

China construction Bank

China Construction Bank (CCB), the country's second largest lender by market value, said Sunday that its net profits rose 26.39 percent year on year to 135 billion yuan ($20.45 billion) last year.

Also, earnings per share rose to 0.56 yuan from 0.45 yuan one year earlier, the Beijing-based bank said in a statement filed at the Shanghai Stock Exchange.

The lender noted that its increased profits were largely due to rising net interest income and commissions.

Net interest income, or revenue from borrowers minus interest paid to depositors, climbed 18.7 percent to 251.5 billion yuan last year, while commissions and income from fee-based services gained 37.61 percent to 66.13 billion yuan.

The bulk of economists surveyed by The Wall Street Journal would bet on the Chinese yuan rising over the next three years and the euro falling–but they’re split on the direction the U.S. dollar is likely to take.

The Journal surveyed 54 economists, not all of whom answer every question and most of whom are U.S.-based, and asked which one currency they would bet on rising in value over the next three years. Eighteen, or 43% of the 42 who responded to the question, pointed to the Chinese yuan. “Chinese inflation makes artificially low values difficult to sustain,” said Sean M. Snaith of the University of Central Florida.

Twelve economists, or 30% of 40 respondents to the question, chose the euro as the most likely to decline in value over that same period. “The debt crisis still has more iterations to go, which will rattle currency markets,” said Diane Swonk of Mesirow Financial.

And the dollar? Eleven said they would bet the greenback will rise in value over the next three years and exactly the same number said they would bet on its value declining.

Just days ago HSBC Holdings PLC said earnings for 2010 doubled from a year earlier, to $13.2 billion, with Asia accounting for almost two-thirds of the profit. But Peter Wong, the bank's chief executive for Asia Pacific, is keen to stress the importance of cost control and measured growth.

Peter Wong says, "If I ever had the chance to write a book, it'd be about how to make complicated life simple."

Career: Joined Citibank in 1980 as an assistant financial controller. Moved to Standard Chartered in 1997 as head of consumer banking for China and Hong Kong. Joined HSBC in April 2005.

Education: educated at Indiana University. Has a bachelor's and MSc in computer science and an MBA in marketing and finance.

Extracurricular: Sports, especially playing golf. "Without sport I think I'd be dead already. Sport gives you a competitive sense."

On the financial crisis: "We [HSBC] were the first ones to come out and talk about subprime. Everybody thought we were smoking something. But later it came true."

China's foreign exchange regulator has refuted media reports that the country may lose up to $450 billion by holding bonds of Fannie Mae and Freddie Mac, the US mortgage giants.

The reports suggested that the US government might phase out the two companies. "The report is groundless," the State Administration of Foreign Exchange (SAFE) said in a statement published on its website on Friday, without referring to any specific media outlets.

The regulator said that it has been receiving regular payments of interest and principal on the bonds it holds in the two companies.

"Calculated in accordance with widely used indexes, from 2008 to 2010 the annual investment return on the debt was about 6 percent on average," the statement said.

China has never invested in the two companies' equities, and so it hasn't been affected by the decline in their stock prices, it added.

The administration reiterated that security is its top priority when making investments using the country's foreign reserves, and it has already taken appropriate measures to offset major potential risks.