|
May 25, 2012 12:24 AM GMT+0800 China s biggest banks may fall short of loan targets for the firsttime in at least seven years as an economic slowdown crimps demandfor credit, three bank officials with knowledge of the matter said. A decline in lending in April and May means it s likely thebanks total new loans for 2012 will be about 7 trillion yuan($1.1 trillion), less than the government goal of 8 trillion yuanto 8.5 trillion yuan, said one of the officials, declining to beidentified because the person isn t authorized to speak publicly.Banks are relying on small- and mid-sized companies for loan growthafter demand from the biggest state-owned borrowers dropped, thepeople said. The drying up of loan demand attests to the severity of China sslowdown and may add pressure on Premier Wen Jiabao to cut interestrates and expand stimulus measures. The economy may grow in 2012 atits slowest pace in 13 years, a Bloomberg News survey showed lastweek, as Europe s debt crisis curbs exports, manufacturing shrinksand demand for new homes wanes. Press officials at the People s Bank of China and the threelargest lenders -- Industrial & Commercial Bank of China Ltd.,China Construction Bank Corp. (939) and Bank of China Ltd. (3988)-- declined to comment. Press officials at Agricultural Bank ofChina Ltd. (601288) weren t immediately available. New bank loans last month dropped 33 percent from March to 681.8billion yuan, missing the 780 billion yuan median forecast ofeconomists surveyed by Bloomberg News. A third of April s newcredit was also so-called discounted bills, or short-term loansoften used by banks to pad the total figure. Worsening Situation This month may be worse. The four biggest banks -- which accountfor about 40 percent of lending -- had advanced only 34 billionyuan as of May 20, Liu Yuhui, a director at the government-backedChinese Academy of Social Sciences, said in an interview this week,without saying where he got the data. The lenders may rush to boostcredit in the last few days, mainly through short-term notes, hesaid. China hasn t officially announced the quotas set for each bank orthe total loan target for 2012. Still, as recently as last month, policy makers were indicating thetarget was 7.5 trillion yuan to 8 trillion yuan. Lenders inChina s eastern province of Zhejiang, for instance, will aim toincrease new loans to about 670 billion yuan, accounting for 8.4 to8.9 percent of the nation s total increase, the government-backedSecurities Times newspaper reported on April 26, citing Liu Renwu,head of the PBOC s Hangzhou branch. Failing to meet the annual loan target would mark a turning pointfor Chinese banks, which have reached or exceeded the centralbank s goal every year that such quotas have been in place sinceat least 2006. Fine Tuning The lending slowdown reflects the faltering economy. China s grossdomestic product expansion, which dropped to 8.1 percent in thefirst quarter, may further slip to 7.9 percent in the three monthsending in June, according to a Bloomberg News survey last week.That would be the sixth quarterly deceleration. April s weak trade and industrial-output data prompted the centralbank on May 12 to announce the third cut in the amount that banksmust set aside as reserves since November. The Chinese government this week signaled a bigger focus onbolstering growth, saying in a statement it will intensify fine-tuning of policies for stable and relatively fasteconomic growth. The nation will start a series of key infrastructure projectsthat are vital to the overall economy and can facilitate growth, and speed up construction of existing railway, environmentalprotection and rural projects, the government said on May 23,summarizing a meeting of the State Council, or Cabinet. Reduced Forecasts Still, Morgan Stanley this week joined banks including GoldmanSachs Group Inc. in lowering its estimate for China s economicgrowth for the year. The annual GDP forecast was cut to 8.5percent, from an earlier 9 percent goal, to reflect theworse-than-expected slowdown in the first four months, chiefeconomist Helen Qiao said in a note to clients on May 21. Since the policy constraints on credit easing have remained inplace for too long, loan demand has been weakening further, HongKong-based Qiao wrote that day. The low volume of bank loans nowreflects weak demand and lack of policy support fromgovernment-driven projects. Policy makers in China may cut interest rates twice this year andfurther reduce the reserve requirements for banks, Qiao forecast. Shibor Drops The waning demand for loans is also reflected in the three- monthShanghai interbank offered rate, or the rate at which Chinese bankssay they can borrow from one another. The so- called Shibor hasfallen every day since March 27, sliding 65 basis points to 4.30percent, according to data compiled by Bloomberg. The outlook for China s economy may be even worse if Greece exitsthe euro and local policy makers don t increase the stimulus,China Investment Capital Corp., the nation s biggest investmentbank, forecast this week. Economic expansion may drop to 6.4percent in 2012 in that case, Beijing-based Peng Wensheng, CICC schief economist, said in a May 23 report. That would be the worst performance for China since 1990, the yearafter the Tiananmen Square protests. We are high quality suppliers, our products such as Led Lighting Distributors , China Triac Dimmer Led Driver for oversee buyer. To know more, please visits 12 Volt Led Driver.
Related Articles -
Led Lighting Distributors, China Triac Dimmer Led Driver,
|
