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Banks likely to lend to smaller firms
By Zhang Fengming |
February 4, 2010, Thursday
|
Online Edition
Online Edition
BANKS in China are expected to shift loans to small and medium companies to gain higher margins amid a tightened cash flow this year, analysts said.
Banking authorities are clamping down on lenders' rapid credit growth, prompting commercial banks to shift their focus from big infrastructure projects to smaller companies, analysts from Gaohua Securities Co said.
"We surveyed bankers and most of them said they will focus on the small and medium enterprises and short-term credit this year on a tighter credit policy," said Xu Ran, a Gaohua Securities analyst.
Chinese regulators have made clear that they want banks to lend more evenly to avoid risks triggered by concentration on certain sectors and companies.
Banks in China extended a record 9.6 trillion yuan (US$1.41 trillion) of new loans in 2009, almost doubling the previous target of 5 trillion yuan. New loans this year are expected to drop to 7.5 trillion yuan. Banks were reported to issue 1.5 trillion yuan of new loans in January but official data is expected next week.
Banking authorities are clamping down on lenders' rapid credit growth, prompting commercial banks to shift their focus from big infrastructure projects to smaller companies, analysts from Gaohua Securities Co said.
"We surveyed bankers and most of them said they will focus on the small and medium enterprises and short-term credit this year on a tighter credit policy," said Xu Ran, a Gaohua Securities analyst.
Chinese regulators have made clear that they want banks to lend more evenly to avoid risks triggered by concentration on certain sectors and companies.
Banks in China extended a record 9.6 trillion yuan (US$1.41 trillion) of new loans in 2009, almost doubling the previous target of 5 trillion yuan. New loans this year are expected to drop to 7.5 trillion yuan. Banks were reported to issue 1.5 trillion yuan of new loans in January but official data is expected next week.
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