Bank of China to provide residential mortgages in UK

Apr. 22, 2009 (China Knowledge) - Bank of China (BOC)<601988><3988>, the nation's third-largest lender, will offer residential mortgages in UK through two key intermediary distributors, the first time for a Chinese lender to enter the UK mortgage market, the Financial Times reported.

According to insiders close to the situation, BOC will ink agreements with Complete Mortgages and an unnamed Surrey-based distributor to provide residential loans to customers with a clean credit record.

BOC hired the services of former Bristol & West Investments' sales manager Gary Sukhija to negotiate the distribution deals.

The Chinese bank is expected to pay 1% for distribution and a further 0.5% to introducing intermediaries. The maximum loan to value (LTV) will not exceed 90%. The bank plans to gain the UK market share through its pricing strategy, more favorable rates as well as cheaper fees, sources said.

H-shares of BOC edged down 0.34% to close at HK$2.94 on Tuesday.