February Credit May Be Less Than 700 Billion Yuan, Q1 New Loans Will Be Below Expectations
The new loans of over 700 billion yuan in January were lower than market expectations, and it is very likely that bank credit in February will also follow this trend. On March 1st, a reporter from China Securities News learned that as of February 24th, the new loans in the banking industry amounted to approximately 600 billion yuan.
Industry insiders estimate that the RMB-denominated new loans in February will be within 700 billion yuan. This person stated: "According to the previous credit rhythm arrangement by the central bank, unless there is a sudden surge in credit in March, it will be highly probable that the new loans in the first quarter will fall below the expected target (2.4 trillion yuan)."
New Loans Continue to Be Weak
In contrast to the monetary easing expectations released by regulatory agencies, since January, the new loans have not significantly surged. Since 2009, the new loans in the first month have consistently exceeded one trillion yuan. However, this year in January, the addition of 730 billion yuan in new loans was unexpected by the market.
A bank insider told the China Securities News that judging from the current data, the bank credit in February may continue to be below expectations. According to the most optimistic estimates, the new loans for the four major banks - ICBC, ABC, BOC, and CCB - would amount to about 200 billion yuan in February. "Based on the proportion of new loan disbursements since the fourth quarter of last year, the total loans for the entire month of February would be around 700 billion yuan," said an industry insider.
An insider in the banking sector revealed that recently, the central bank has allowed the five major state-owned commercial banks to increase their loan disbursement in the first quarter, with a temporary quota set at a 5% increase compared to the same period last year. This year, the overall credit arrangement specified by the central bank continues the rhythm of "30%, 30%, 20%, 20%" for the four quarters as it did last year.
Analysts believe that according to the total goal of 8 trillion yuan, the new loans in the banking industry in the first quarter should be around 2.4 trillion yuan, but the new loans in the first two months have only been around 1.4 trillion yuan. Unless there is another surge in March, the new loans in the first quarter will fall below the expected target.
Decrease in Credit Demand
An insider from a large state-owned bank expressed that the effective demand for loans is indeed decreasing, and sometimes even when there is a quota, it cannot be utilized. "The demand for fixed asset investment is declining, which may be related to companies starting operations later after the Spring Festival. Additionally, due to the unclear economic situation in Europe and America, some outward-oriented enterprises are beginning to contract their operations and reduce investments."
This person introduced that in the fourth quarter of last year, many banks were reducing the scale of local financing platform loans. "After the platform loans are recovered, banks often will not add new credit lines."
He said that enterprises are now postponing some of their funding needs. Everyone expects a reduction in the reserve requirement ratio and interest rates, so from a financial cost perspective, enterprises are not eager to apply for loans from banks.
Banking industry insiders stated that the loan-to-deposit ratio and capital adequacy ratio constraints have somewhat curtailed the enthusiasm of banks to lend. Since the fourth quarter of last year, deposit outflows have caused some banks to "hit the line" on their loan-to-deposit ratios, making deposits an important factor affecting bank lending. Many banks have placed "deposit establishment" as the key focus of their business work for this year.
http://www.wyky.cn