Chinese banks are racing to expand their loan books before the year ends, slashing interest rates on property-backed business loans and loosening lending standards in ways that analysts say could amplify financial risks, reports Caixin. Just weeks ago, a Beijing resident surnamed Chen was told her application to boost a property-collateralized business loan might not be approved because her home was slightly above the bank’s age limit.
But as lenders began pushing aggressively for year-end volume, the same bank approved her 10-year loan at 2.75% with an 80% loan-to-value (LTV) ratio—meaning she could borrow four-fifths of her property’s assessed value. Soon after, other banks offered better terms, Chen told Caixin.
Her experience reflects a nationwide scramble. Major state-owned lenders including Industrial and Commercial Bank of China, China Construction Bank and Bank of China are offering rates around 2.45%, while some joint-stock banks have cut rates to below 2% and lifted LTV ratios to 85%. Industry insiders say banks are rushing to lock in business before Dec. 31 to hit 2025 targets and build momentum for next year.