Banks eye new areas of lending growth
By Zhang Fengming |
October 15, 2010, Friday
|
Print Edition
Print Edition
BANKS are cutting loans to overcapacity or high-polluting sectors as they shift their lending focus to seek new sources of growth, according to an industry survey yesterday.
They are now more keen to lend to alternative energy and equipment manufacturing industries as well as logistics, agriculture, health care and education, said PricewaterhouseCoopers, quoting a survey it made with China Banking Association on 44 major banks in China.
About 75 percent of the respondents said they would "limit credit investment to businesses that are at overcapacity, high polluting, or high energy consuming."
The survey also showed that about half of the respondents believe local government-backed debt carries a relatively high risk.
Credit risks are rising in China's banking system and financing arms of local governments have been identified as one source of sour loans in the long term, Standard & Poor's said earlier.
But the bad loan ratio at banks in China fell to 1.3 percent at the end of June, down 0.28 percentage point.
They are now more keen to lend to alternative energy and equipment manufacturing industries as well as logistics, agriculture, health care and education, said PricewaterhouseCoopers, quoting a survey it made with China Banking Association on 44 major banks in China.
About 75 percent of the respondents said they would "limit credit investment to businesses that are at overcapacity, high polluting, or high energy consuming."
The survey also showed that about half of the respondents believe local government-backed debt carries a relatively high risk.
Credit risks are rising in China's banking system and financing arms of local governments have been identified as one source of sour loans in the long term, Standard & Poor's said earlier.
But the bad loan ratio at banks in China fell to 1.3 percent at the end of June, down 0.28 percentage point.
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