11
the pre-sale of a residential development above the Shau
Kei Wan MTR station, raised the maximum amount of mortgage
loans to about 90% of the sales value of the property,
from an earlier 80%, and reduced the mortgage rate to 7
3/4% from the prevailing 8 1/4%. The aggressiveness of the CSOBS in the home mortgage market is likely to put other banks under competitive pressure.
22.
Participation in property development: apart
from the several China-based companies (namely, China
Resources Company, Kiu-Kwong Investment Corporation, China
Merchants Steam Navigation Company Ltd. etc.) that have
actively engaged in property investments in Hong Kong, the
Bank of China Group has also played an important role in
financing a number of property development projects. For
example: in 1980 the Bank of China, Kiu Kwong Investment
Corporation, Sun Co., Hong Kong Land and Jardines jointly
invested HK$1 billion in the development of the Lok Yeung
Sun Chuen MTR depot, and in 1982 the same bank bought a
site in Murray Road for HK$1 billion for the construction
of the new Bank of China Building at another HK$1
billion. In 1985 the Bank of China supported the
establishment of Kowin Huakong Group Ltd., a joint venture comprising the California-based Kowin group of companies
and Hillo Co. Ltd., a China-controlled Hong Kong registered company. The new company was to be involved in diversified investments, including property, industry, hotel development, trading, service-oriented information
systems and financial services.
G.F. 326
CONFIDENTIAL #