In the first half of this year, the most competitive business area in the banking industry has been housing mortgages. With the 5-year LPR (Loan Prime Rate) dropping twice within the year, banks are also desperately lowering mortgage rates to attract more customers during the sluggish period of real estate transactions.

According to the semi-annual reports disclosed by listed banks, housing mortgages continue to contract as they did last year. The balance of personal housing loans from 42 listed banks decreased by 319.1 billion yuan compared to the beginning of the year, of which the six major state-owned banks decreased by 311.9 billion yuan in total.

While mortgage assets are shrinking, the rate of loan defaults is continuously rising.

First Financial Daily found through Wind data statistics that among the 42 listed banks, 21 disclosed the non-performing loan ratio of personal housing loans for the half year, with 19 showing varying degrees of increase. On average, the average non-performing loan ratio for housing loans from these 21 banks increased by 0.1 percentage points.

Mortgage scale shrank by over 300 billion in half a year

Wind data shows that in the first half of the year, the balance of personal housing loans from 42 listed banks exceeded 34 trillion yuan. Among them, the six major state-owned banks firmly controlled the "mortgage world", with the balance of personal housing loans all exceeding one trillion yuan in the first half of the year, totaling 26 trillion yuan, accounting for 77% of the 42 listed banks.

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Among them, the bank with the highest balance of personal housing loans is still the China Construction Bank, with 6.31 trillion yuan; followed by the Industrial and Commercial Bank of China, reaching 6.17 trillion yuan. Among the joint-stock banks, only China Merchants Bank and Industrial Bank had a balance of personal housing loans exceeding one trillion yuan in the first half of the year, with 1.38 trillion yuan and 1.07 trillion yuan respectively.

Looking at the increase, the trend of housing mortgage contraction has spread from 2023 to 2024.

In 2023, the scale of housing mortgages from 42 listed banks shrank for the first time, decreasing by 546.7 billion yuan compared to the previous year, of which the six major banks decreased by more than one trillion yuan in total. In the first half of this year, the balance of housing mortgages from 42 listed banks decreased by another 319.1 billion yuan compared to the beginning of the year, of which the six major banks decreased by 311.9 billion yuan in total.

In terms of proportion, state-owned banks decreased by 0.82% from the beginning of the year, joint-stock banks decreased by 1.26% from the beginning of the year, and regional banks decreased by 1.77% from the beginning of the year.Among them, Industrial and Commercial Bank of China and Agricultural Bank of China both saw a reduction of over 100 billion yuan compared to the beginning of the year, with 123.1 billion yuan and 100.7 billion yuan respectively; followed by China Construction Bank and Bank of China, which reduced their personal housing loan balances by 76.5 billion yuan and 33.6 billion yuan respectively in the first half of the year; Industrial Bank and China Merchants Bank each reduced by over 10 billion yuan; and Rui Feng Bank had the highest reduction ratio, decreasing by 9.76% compared to the beginning of the year.

Out of 42 listed banks, only 13 banks achieved a net increase in personal housing loans in the first half of the year.

Among them, Postal Savings Bank of China had the largest increase, with a personal housing loan balance of 2,361.6 billion yuan in the first half of the year, a net increase of 2.36 billion yuan compared to the beginning of the year; China Zheshang Bank had the highest percentage increase, with a personal housing loan balance of 15.53 billion yuan, a 12.66% increase compared to the beginning of the year; in addition, CITIC Bank's personal housing mortgage loan balance was 98.85 billion yuan, with an increase of 1.73 billion yuan.

Efforts to maintain the basic housing loan base

Looking at the financial reports of various banks, listed banks have generally increased their efforts in housing mortgage lending and improved service experience. However, due to the sluggish real estate sales and factors such as early repayments, the increase has shrunk.

For example, Ping An Bank stated that in the first half of the year, it increased the lending efforts in housing mortgages, certified mortgages, and new energy vehicle loans.

Chongqing Bank stated that in terms of personal loans, it continued to carry out housing loan business, actively implemented new housing loan policies, optimized the loan process, and effectively supported the financing needs of citizens for basic and improved housing.

Postal Savings Bank of China stated that the bank actively responded to the national policies and regulatory requirements on housing loans, continuously refined online processes, optimized remote acceptance of housing loans, mobile banking online house viewing, and other functions, improved customer service experience, and met the basic and improved housing needs of residents.

Shanghai Rural Commercial Bank stated that in terms of real estate mortgage loans, it significantly increased the efficiency of mortgage loan operations, and the amount of loans increased significantly compared to the same period last year, with a 13.81% increase. However, the scale of early repayments continued to be high, and at the end of the report period, the balance of real estate mortgage loans decreased by 2.877 billion yuan compared to the end of last year, a decrease of 2.82%.

Guiyang Bank stated in its semi-annual report that in terms of personal housing mortgage loans, the bank actively adapted to the new changes in the supply and demand relationship of the real estate market, implemented differentiated housing credit policies, promptly adjusted the standards for the number of personal housing loans, down payment requirements, and interest rate floor policies, and fully met the reasonable loan needs of homebuyers, promoting the stable and healthy development of the real estate market. It firmly adheres to the development direction of "doing well in new houses and expanding in second-hand houses", continues to enhance the competitiveness of the "Shuang Mortgage" brand, actively promotes the "mortgage transfer" business, and achieves cross-bank mortgage transfer.Data indicates that as of the end of the reporting period, Guiyang Bank's personal housing mortgage loan balance stood at 21.2 billion yuan, an increase of 600 million yuan from the beginning of the year, representing a growth of 3.08%.

Rising defaults test banks' risk control capabilities.

Personal housing loans have traditionally been considered high-quality assets for banks. However, it is noteworthy that the continuous rise in the non-performing loan (NPL) ratio for housing mortgages has become a widespread trend this year.

Among the 42 listed banks, 21 disclosed the NPL ratio for personal housing loans for the half-year period, with 19 showing varying degrees of increase. On average, the NPL ratio for these 21 banks increased by 0.1 percentage points.

Specifically, the NPL ratios for personal housing loans at Qingdao Rural Commercial Bank, Lanzhou Bank, Zhengzhou Bank, and Chongqing Bank all exceeded 1%, at 1.33%, 1.25%, 1.12%, and 1.08%, respectively.

Chongqing Bank's NPL ratio for personal housing loans increased by 0.31 percentage points from the beginning of the year. CITIC Bank's NPL ratio for personal housing loans is 0.71%, up 0.21 percentage points from the end of the previous year; the watch list loan ratio is 0.30%, up 0.05 percentage points from the end of the previous year.

In response, CITIC Bank stated that the increase in NPL and watch list loan ratios from the end of the previous year is due to factors such as sluggish real estate sales and a slowdown in economic growth. The bank's weighted average mortgage ratio for personal housing loans remains around 40%, indicating that the overall risk of the personal housing loan business is essentially controllable.

China Merchants Bank's NPL ratio for personal housing loans in the first half of the year was 0.4%, up 0.03 percentage points from the end of the previous year; the watch list loan ratio was 1.16%, up 0.21 percentage points from the end of the previous year; and the overdue loan ratio was 0.69%, up 0.15 percentage points from the end of the previous year.

In its semi-annual report, China Merchants Bank stated that it has always adhered to regular monitoring and revaluation of the value of existing collateral. As of the end of the reporting period, the weighted average mortgage ratio for personal housing loans was 33.05%, up 0.12 percentage points from the end of the previous year, with collateral remaining sufficient and stable, and the overall risk of the personal housing loan business is controllable. Additionally, in the front-end admission process, the bank insists on the "three excellences" strategy of "selecting excellent customers, selecting excellent collateral, and selecting excellent regions." At the same time, the bank is committed to implementing national policies, tailoring strategies to local conditions, and enhancing risk prevention and control, striving to improve the risk resistance of the personal housing loan business.