Opening new channels for house financing

CCB is the Chinese shareholder, and Zhang Enzhao takes over the position of Chairman
 
　　▲The opening ceremony

Recently people who want to buy houses in Tianjin have another financing choice, i.e. mortgage loan based on their stable monthly savings deposit. On February 15, government officials, representatives of the financial community and domestic and overseas journalists gathered in Tianjin to witness the opening ceremony of Sino-German Bausparkasse, the first China-German mortgage savings bank in China. CCB and Bausparkasse Schwäebisch Hall hold 75.1% and 24.9% shares in the joint venture respectively. President Zhang Enzhao is full of confidence of the prospects of the bank, saying that “Sino-German Bausparkasse will not only help improve the real estate financing business of CCB but also promote the brand value of our bank”. The German investor is also fully ambitious of the housing saving business in China. Dr. Erdland of Bausparkasse Schwäebisch Hall expressed his wish by citing an ancient Chinese saying that “the ordinary Chinese people dream of living a good and prosperous life. Therefore, it is better o go back and make a net than to stand by the pond and long for fish, and I hope that Sino-German Bausparkasse will be that ‘net’”.
　
At the opening ceremony President Zhang Enzhao said that as early as at the beginning of the 1980s CCB has initiated the commercial mortgage loan services for individuals and in 1992 it first launched the housing accumulation fund business in China. Now it once more takes the lead to introduce mortgage savings in China, which makes it possible for the three popular house financing models to be applied, combined or supplemented with each other in the Chinese market.

Customers in need of this service should first of all make deposits in the home savings bank and as return will receive not only interest but also corresponding government rewards. Once qualified they can make loans with the interest rate far lower than the market level. Currently the annual interest rate of the major product of the joint venture is 3.3% which is fixed during the contract term and remains free from repayment risk caused by market fluctuations. In addition to individual customers, the product also provides business customers with an ideal mortgage savings solution to reward their outstanding employees.
　　
In response to the questions of the media, Zhang Enzhao said that the external environment for setting up a mortgage savings bank has got ready in China. Introducing the mature mortgage savings model of Germany complemented by other individual mortgage loan products of CCB, the mortgage savings bank can offer customer-tailored services to meet the increasingly diversified house financing demands of the Chinese people. Zhang Enzhao also stressed that both the deposit and loan programs have passed the three-year study of CCB mortgage savings task force and therefore he is fully confident of starting from Tianjin to spread the model nationwide.
　
Sino-German Bausparkasse not only sells mortgage savings contract through CCB’s wide business network but also builds its own direct sales force. It will take a closed operational model of combining deposits with loans completely, which by following the symmetry principle of bank operations will help cut liability risks, ensure that each voluntary depositor has the equal opportunity of enjoying low-interest loans and guarantee the adequate pool of mortgage loans.
　　
Mayor Dai Xianglong of Tianjin Municipality who was invited to the opening ceremony highly recognized the establishment of the joint venture. He believes that the emergence of the Sino-German Bausparkasse is a good experiment of China’s opening of the financial industry and will surely diversify the players of Chinese home financing market and promote the reform of Chinese housing system.
　　
Assistant President Chen Zuofu of the head office of CCB and the Beijing Chief Representative of Bausparkasse Schwäebisch Hall co-chaired the opening ceremony.