June 21, 2012
Translated by Zhu Na

China’s big four commercial banks lent out 25 billion yuan in the first half of June, China Securities Journal reported Thursday, with the figure casting doubt on analysts’ expectations that new loans across all the country’s banks will total between 900 billion yuan and one trillion for the full month. 

One person familiar with the matter told the paper that the China Banking Regulatory Commission had required commercial banks make more loans at the beginning of June, especially to support railways, roads, housing and other infrastructure.

"In order to achieve steady growth, the bank will gradually increase support to the real economy," one person close to the regulators said.

The chairman of one publicly-traded bank said that practically the only projects that needed cash were ones to which he and other bankers were afraid to lend.

Analysts are expecting 8 trillion yuan of new loans for the whole year, with 2.4 trillion yuan, or 30% of that total coming in the second quarter. In the first two months of the quarter, new loans totaled 1.48 trillion, hence the Securities Journal’s figure of 900 billion to one trillion for expected lending in June.

Bank of Communications Chief Executive Lian Ping (連平) said that banks will increase the number of new loans in order to offset the contraction of their new interest margin that was brought when the central bank recently allowed banks to pay deposits higher interest rates and charge borrowers less.

Links and Sources
China Securities Journal  6月銀行新增信貸或達萬億
The Wall Street Journal Charting the Brouhaha Over China’s Banks