March 10,2011

China New Loans in Feb: Slightly above RMB500bn

By CSC staff,Shanghai

According to Economic Observer, unnamed source suggests that new loans in Feb could be slightly above RM500bn, below RMB600bn previously whispered. The big four state banks jointly issued RMB218bn new loans.

It seems that the PBoC was doing a good job in reining in bank lending. The PBoC plans RMB7.0-7.5tn new loans this year, with 30% (RMB2.2tn assigned to 1Q; RMB1.0tn used in Jan, and a combined RMB1.2tn for Feb and Mar). So RMB500-600bn in Feb, which has fewer working days anyway, should be market neutral. Someone may mistakenly interpret a low new loans number as lack of demand, while some others may incorrectly speculate the PBoC to loosen its lending control. Our suggestion: No need to make the case too complicated. Just assume that PBoC this year will allocate RMB7.0-7.5tn new loans at a proportion of 3:3:3:1 for the four quarters.

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