Some banks in Hong Kong are not extending mortgages for China Vanke‘s Le Mont project due to be launched in Tai Po, another setback for the embattled mainland Chinese developer battling a liquidity crisis.
Standard Chartered, one of the city’s three currency-issuing banks, and Chong Hing Bank were not accepting mortgage requests from potential homebuyers at Le Mont, according to property agents.
Standard Chartered declined to comment. Chong Hing Bank said in a statement that it mainly considers the mortgaged property’s value and quality together with the applicant’s repayment ability when evaluating mortgage loan applications.
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Some potential buyers were also told by both these banks that they would not provide loans for the Le Mont project.
China Vanke’s Le Mont residential project in Tai Po. Photo: Handout alt=China Vanke’s Le Mont residential project in Tai Po. Photo: Handout>
The position taken by Standard Chartered and Chong Hing Bank marks a fresh blow for Vanke. The one-time second-largest developer on the mainland faces nearly US$5 billion in debt maturities this year worsened by a years-long property downturn at home. Vanke is also likely to post a record net loss of 45 billion yuan (US$6.2 billion) for 2024.
“Banks are assessing the likelihood of a Vanke default [and whether] it is able to complete the project,” according to a lawyer. “For presale units, banks are concerned if the money can be recouped after granting mortgages to buyers.”
Meanwhile, Bank of China (Hong Kong), Hang Seng Bank, HSBC and Bank of East Asia were yet to confirm mortgage requests, agents said.
Le Mont started accepting registrations of interest last week for the 403-flat project, which is expected to be completed in July 2026. The company announced on Tuesday that it would offer 228 units for sale on Saturday.
The lawyer said that the proceeds from the flat sales would not directly go to Vanke but to an escrow account of its representative law firm to repay construction costs and loans.
If the sales do not go as expected, the onus would be on Vanke to find funds to complete the project, he added. “Therefore, some banks are refusing to grant mortgages due to credit risks.”
Still, other banks were continuing to process mortgage applications for would-be buyers at Le Mont, according to Vanke Hong Kong, a unit of the mainland developer.
