More on China’s Credit Crack High: 80pc of Lending Quota Gone

ZH: An Unexpected Problem Emerges: Chinese Banks Exhaust 80% Of Loan Quotas In First Half Of 2017

Reuters reports that following 7 months of blistering credit creation in terms of both new Loans and Total Social Financing, Chinese banks are set to see a slowdown in lending growth in the second half of the year, having exhausted most of their annual credit quota, in the process raising the spectre of corporate defaults as financing costs climb further in the world’s second-largest economy. The math is disturbing: only six months into 2017, banks have already used 80% of their yearly credit quota over January to June, versus the usual 60%, amid the abovementioned regulatory push to bring shadow financing activities to the main loan book, and Beijing’s crackdown on riskier lending.

While “loan demand is strong throughout the whole year”, as the second chart from the top shows, “the core conflict in the second half is loan quota – whether banks will be able to extend more loans than they originally planned” said Ma Kunpeng, chief financial industry analyst at China Merchants Securities, quoted by Reuters

Author: 罗臻 http://www.investinginchinesestocks.blogspot.com

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