Tight policy curbs loan growth
By Zhang Fengming |
June 23, 2011, Thursday
|
Print Edition
Print Edition
THREE quarters of overseas banks in China said tighter monetary policies have curbed their loan business, an industry survey showed yesterday.
"The majority of overseas banks in China said tightening measures have a negative impact on their lending business," PricewaterhouseCoopers said in a survey yesterday.
Tight liquidity, the need to control loan-to-deposits ratio under 75 percent by the end of this year and credit controls from regulators are cited as three major curbs on loan growth.
PwC conducted the survey of chief executives or top bankers from 42 overseas banks in April and May. The accounting firm started the annual survey in 2005.
China is tightening its monetary policy to curb credit-driven inflation. Since October, China has raised interest rates four times and raised the reserve requirement ratio nine times.
Banks in China issued a combined 17.6 trillion yuan (US$2.7 trillion) of new yuan-backed credit in 2009 and 2010. New yuan loans totaled 3.6 trillion yuan in the first five months of this year, down 12 percent from the same period last year.
Meanwhile, overseas lenders said the regulatory environment, high turnover rate and competition from domestic rivals are the biggest challenges of doing business in China.
About 75 percent of respondents said turnover rate was more than 10 percent in 2010.
"The majority of overseas banks in China said tightening measures have a negative impact on their lending business," PricewaterhouseCoopers said in a survey yesterday.
Tight liquidity, the need to control loan-to-deposits ratio under 75 percent by the end of this year and credit controls from regulators are cited as three major curbs on loan growth.
PwC conducted the survey of chief executives or top bankers from 42 overseas banks in April and May. The accounting firm started the annual survey in 2005.
China is tightening its monetary policy to curb credit-driven inflation. Since October, China has raised interest rates four times and raised the reserve requirement ratio nine times.
Banks in China issued a combined 17.6 trillion yuan (US$2.7 trillion) of new yuan-backed credit in 2009 and 2010. New yuan loans totaled 3.6 trillion yuan in the first five months of this year, down 12 percent from the same period last year.
Meanwhile, overseas lenders said the regulatory environment, high turnover rate and competition from domestic rivals are the biggest challenges of doing business in China.
About 75 percent of respondents said turnover rate was more than 10 percent in 2010.
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