Big 5 banks allowed to raise lending in Q1
Source: Bloomberg News |
January 19, 2012, Thursday
|
Print Edition
Print Edition
CHINA'S central bank will let the nation's five biggest banks increase first-quarter lending as an export slowdown and a clampdown on real estate speculation threaten growth.
The banks can increase new loans by a maximum of about 5 percent from a year earlier, according to two people at state lenders who have knowledge of the matter. Separately, the China Banking Regulatory Commission has warned lenders to limit local government debt risks, a person with knowledge of the issue said yesterday. The People's Bank of China won't comment on anything related to credit quotas, a press official said in Beijing.
China's economic growth cooled to 8.9 percent in the fourth quarter of last year, the slowest pace since the first half of 2009, as Europe's debt crisis curbed export demand and the property market weakened, a government report showed on Tuesday. Premier Wen Jiabao aims to sustain the expansion without re-inflating property-price bubbles or driving up consumer prices.
The central bank's guidance to lenders is "cautious easing, as it will provide some support to the economy but not enough to bring growth back above 9 percent," said Yao Wei, a Hong Kong-based economist for Societe Generale SA.
The PBOC also said 30 percent of full-year lending should be in the first and second quarters and 20 percent in each of the final two quarters, the people said.
The Industrial and Commercial Bank of China, China Construction Bank, the Bank of China, the Agricultural Bank of China and the Bank of Communications are the nation's five biggest.
Chang Jian, an economist at Barclays Capital in Hong Kong, said the guidance on lending amounted to "modest" easing.
China is still grappling with the fallout from a record credit expansion in 2009 and 2010, which fueled price gains and concern that local government financing vehicles will be unable to repay their debts. Inflation peaked at 6.5 percent in July.
China warned its banks to resist demand for credit from local governments which pursue projects that bolster growth, a source said.
The banks can increase new loans by a maximum of about 5 percent from a year earlier, according to two people at state lenders who have knowledge of the matter. Separately, the China Banking Regulatory Commission has warned lenders to limit local government debt risks, a person with knowledge of the issue said yesterday. The People's Bank of China won't comment on anything related to credit quotas, a press official said in Beijing.
China's economic growth cooled to 8.9 percent in the fourth quarter of last year, the slowest pace since the first half of 2009, as Europe's debt crisis curbed export demand and the property market weakened, a government report showed on Tuesday. Premier Wen Jiabao aims to sustain the expansion without re-inflating property-price bubbles or driving up consumer prices.
The central bank's guidance to lenders is "cautious easing, as it will provide some support to the economy but not enough to bring growth back above 9 percent," said Yao Wei, a Hong Kong-based economist for Societe Generale SA.
The PBOC also said 30 percent of full-year lending should be in the first and second quarters and 20 percent in each of the final two quarters, the people said.
The Industrial and Commercial Bank of China, China Construction Bank, the Bank of China, the Agricultural Bank of China and the Bank of Communications are the nation's five biggest.
Chang Jian, an economist at Barclays Capital in Hong Kong, said the guidance on lending amounted to "modest" easing.
China is still grappling with the fallout from a record credit expansion in 2009 and 2010, which fueled price gains and concern that local government financing vehicles will be unable to repay their debts. Inflation peaked at 6.5 percent in July.
China warned its banks to resist demand for credit from local governments which pursue projects that bolster growth, a source said.
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