Singapore’s UOB Halts London Property Loans After Brexit Vote

(Bloomberg) -- United Overseas Bank Ltd., Southeast Asia’s third-largest bank by assets, said it will temporarily halt loans for property purchases in London, due to the uncertainty caused by the U.K. vote to leave the European Union.

“As the aftermath of the U.K. referendum is still unfolding and given the uncertainties, we need to ensure our customers are cautious with their London property investments,” a UOB spokesperson said in an e-mail. “We are monitoring the market environment closely and will assess regularly to determine when we will re-instate our London property loan offering.”

Singapore’s Business Times newspaper reported earlier on UOB’s decision to suspend its London property lending.

Britain’s vote to secede from the EU caused a plunge in the pound and wiped almost $4 trillion off the value of global equities. It has also led to predictions that U.K. property prices will drop as foreign buyers hold back from new purchases.

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UOB’s Singapore rivals, DBS Group Holdings Ltd. and Oversea-Chinese Banking Corp., said they continue to offer financing for property purchases in London, though they both advised their customers to exercise caution.

“For customers interested in buying properties in London, we would advise them to assess the situation carefully before committing to their purchases as there could be potential foreign exchange and sovereign risks,” Tok Geok Peng, DBS’s executive director of secured lending, said in an email.

DBS provides loans in either Singapore dollars or pounds, with most customers opting to borrow in the U.K. currency because any rental income from their London properties would be denominated in sterling, the bank said.

To contact the reporters on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net, Melissa Cheok in Singapore at mcheok2@bloomberg.net. To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Marcus Wright, Darren Boey

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