PBOC Asks Banks to Curb New Loans
(Beijing) — China’s central bank is continuing to issue informal notices to commercial lenders to control the size of credit loans, several bankers said, as Beijing continues its efforts to cool a lending frenzy and reduce financial leverage.
Since the weeklong Lunar New Year holiday that ended Feb. 2, a local commercial lender has been slowing the pace it grants loans, urging branches to halt lending, sources from the bank told Caixin. The move reflects bankers’ claims that the latest informal directives to curb new loans do not solely target big state-owned lenders.
Chinese banks are expected to dole out roughly 2.2 trillion yuan ($320 billion) in new loans in January, lower than the record 2.51 trillion yuan in the same period last year, according to analysts from China International Capital Corp., one of China’s top investment banks. But several banking industry analysts believe that new loans in the first month of 2017 may set a record.
At the start of each year, Chinese banks are inclined to pre-empt requests for loans in a bid to secure business as early as possible. This was apparent last year when commercial lenders granted 2.51 trillion yuan in new loans. This was the highest monthly level ever, although it was spurred in part by an expectation of falling interest rates. At that time, the central bank also stepped in to curb bank loans.
“The central bank is steadfast in its determination to cut financial leverage, and as a result, house sales may decline and growth in demand for credit loans would drop,” said analysts from Sinolink Securities in a research note.
But the squeeze on bank loans may have come about as a result of the Macro Prudential Assessment system, a framework adopted by the central bank at the beginning of 2016 to gauge risks in bank-credit exposure.
A banker told Caixin that it was normal for banks to adjust the size of loans as the central bank strictly measures lenders’ capital adequacy and loan-to-deposit ratios, and punitive lower interest rates on reserves will be imposed if banks fail to meet the requirements.
Contact reporter Dong Tongjian (firstname.lastname@example.org)
Jun 03 18:07
Jun 03 16:48
Jun 03 13:17
Jun 03 12:25
Jun 03 06:45
Jun 02 16:29
Jun 02 14:45
Jun 02 12:04
Jun 02 05:38
Jun 02 05:35
Jun 01 17:41
Jun 01 12:22
May 29 18:23
May 29 18:04
May 29 12:40
- 1In Depth: Huawei’s Chip Dreams in Crosshairs of Latest U.S. Assault
- 2Premier Sends ‘Powerful’ Signal for China to Join Asia-Pacific’s Largest Trade Pact
- 3Despite Stalling Tactics, Luckin Likely to Get Thrown Off Wall Street: Experts
- 4China Won’t Ease Curbs on International Flights as Fast as Expected
- 5Luckin Founder to Cash Out of Rental Car Unit
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas