CREDIT BOOM

2014/8/18

From：Macau Business Daily

Loans to foreign companies have increased 20-fold. Total credit approved by Macau banks increased as much as 30 percent in June. New mortgage loans to non-residents amounted to MOP2.25 billion.

Mortgage loans to foreign companies in Macau skyrocketed in June, growing more than 20-fold from a year ago, as firms used residential properties as collateral (guarantee) for access to credit to finance their activities here.
The incorporation of new companies in Macau is beating records every quarter; since the beginning of the year more than 2,500 businesses have begun operating in Macau. The newly approved credit is boosting Macau banks’ balance sheets.
According to data released by the Monetary Authority of Macau (AMCM) on Friday, new mortgage loans to non-residents amounted to 2.25 billion patacas in June, a 20-fold increase from a year ago, when mortgages to foreigners in Macau reached 110 million patacas.
The huge increase was ‘mainly driven by loans approved to enterprises, using uncompleted units of residential properties already acquired as collateral and for purposes other than purchase of residential properties,’ the AMCM said.
New mortgage loans approved for residents also posted a solid performance. They increased 16.4 percent from May and more than doubled (jumping 140 percent) from a year ago. Banks here approved 6.93 billion patacas in credit for residents to buy property.
In total, the new mortgage loans grew to 9.18 billion patacas in June from 6.04 billion patacas in the previous month, a 51.8 percent rise, AMCM said. Compared to June 2013, the value of new mortgages tripled (an increase of 207.4 percent). The increasing price of homes in Macau is forcing residents and non-residents to ask banks for bigger loans.
Today, the Macau banking system has outstanding mortgage loans of 137 billion patacas. That’s 5.4 percent more than in May (130 billion patacas) and 30 percent above what was reported a year ago, AMCM data reveals. The mortgage market is still dominated by Macau’s clients, responsible for 94 percent of the total of outstanding loans. Compared to May, the outstanding amount of credit for residential grew 4 percent and 34.6 percent in June to residents and non-residents, respectively.
New commercial real estate loans increased by 95.1 percent in June compared to May to 10.9 billion patacas. Of these, almost all – 99 percent – was granted to residents. In terms of value, new real estate loans for commercial purposes to residents doubled – increasing 97 percent – while those to non-residents remained flat, decreasing 0.7 percent. On an annual basis, new approvals of commercial real estate loans grew 181.2 percent.
Non-performing loans in Macau continue to be almost nil. The delinquency ratio for mortgages was 0.06 percent for all credit for housing, while for commercial purposes it stayed unchanged at 0.08 percent.

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