Jan. 28 (Bloomberg) -- China’s banking regulator told lenders to step up scrutiny of property loans while pledging to satisfy “reasonable” financing needs as it seeks to control credit growth and prevent asset bubbles.
Banks should “strictly” follow real estate lending policies, the China Banking Regulatory Commission said yesterday in a statement on its Web site after a quarterly assessment of the nation’s economic and financial situation. It repeated a call for banks to “reasonably control” lending growth.
China’s stocks fell for a fourth day on concern efforts to rein in lending will slow the world’s fastest-growing major economy. Chinese banks advanced a record 9.59 trillion yuan ($1.4 trillion) of new loans last year, helping spur an 80 percent increase in the Shanghai Composite Index and driving property prices to their biggest gain in 18 months in December.
“The key this year is the timing and pace of lending,” said Sheng Nan, a Shanghai-based analyst at UOB Kayhian Investment Co. “The risk from not lending enough is even bigger” than lending too fast because projects started last year will need continued funding support, he said.
The Shanghai Composite slid 1.1 percent to 2,986.61 yesterday, dropping below 3,000 for the first time since October. Industrial & Commercial Bank of China Ltd. led the decline, dropping 1.8 percent to 4.90 yuan.
January Surge
Chinese banks, including Bank of China Ltd. and China Construction Bank Corp., have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month, people familiar with the situation said Jan. 26.
Chinese banks advanced 1.45 trillion yuan of loans in the first 19 days of this month, the 21st Century Business Herald reported this week, without citing anyone. That’s equivalent to 19 percent of the regulator’s full-year target.
“I don’t see a slowdown in lending as a bad thing,” investor Mark Mobius, who oversees about $34 billion in emerging markets funds as chairman of Templeton Asset Management Ltd., said in an interview at a conference in Sydney yesterday. “It moderates risk to some degree because people don’t go overboard.”
Beijing-based ICBC, the world’s largest bank by market value, said yesterday that loan growth has “stabilized” after growing at a relatively fast pace in the first half of January. The bank said it will focus on financing existing government projects.
ICBC said it “won’t rush” and will “pace its lending,” according to yesterday’s statement.
Speculative Flows
The Wall Street Journal reported earlier that ICBC ordered branches in Beijing to stop issuing new loans until the end of the month. Banks across the country have suspended new lending since Jan. 19, Dong Tao, a Hong Kong-based economist at Credit Suisse Group AG, wrote in a note to clients this week.
Liu Mingkang, chairman of the banking regulator, said in an opinion piece earlier this month that bank loans had been channeled into stock and property markets, and the watchdog “stepped in to stop that.” China tightened rules on loans for homes, automobiles, fixed-asset investments and working capital to limit speculative flows.
Global equities tumbled last week on concern China will raise borrowing costs after the economy grew 10.7 percent in the fourth quarter, the fastest pace since 2007, and inflation accelerated to 1.9 percent in December. The Shanghai gauge has lost 8.9 percent this year.
The People’s Bank of China raised the proportion of deposits that banks must set aside as reserves starting Jan. 18.
The banking regulator reiterated that banks should pace their lending every quarter, according to yesterday’s statement. The regulator has capped new lending at 7.5 trillion yuan for 2010.
--Luo Jun, Zhang Dingmin, Li Yanping. Editor: Chitra Somayaji, Matthew Brooker |
发表于 2010-1-28 00:40
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