A leading Chinese bank is set to tighten its commercial lending criteria to guard against exposure to credit risks following the global downturn.
Commercial lending cutbacks are set to be introduced by the Industrial and Commercial Bank of China (ICBC) to guard against credit risks.
In a statement emailed to Reuters today (February 8th), ICBC said: "The bank will strictly control the quality of new lending, strengthen the management of potential risks and ensure a stable quality of credit assets."
The announcement comes amid growing concern that sources of
finance for business will dry up following the Bank of England's decision to end its quantitative easing programme.
A new report from Ernst and Young's ITEM Club published earlier this month suggested that the recent upturn in
commercial finance is unsustainable because it is not backed up by changes to market fundamentals.
Commenting on the findings, head of real estate at Ernst and Young Dean Hodcroft said: "The upturn has largely been based on investors deciding the bottom of the market had been reached."
He added that a massive decline in prices over the last couple of years has also prompted more attractive buying opportunities.
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