Analysts See Chinese Banks Cutting Loans by 50%

Mainland China banks might reduce new loans in the first quarter of this year by almost 50%, reveals the South China Morning Post, quoting analysts at BNP Paribas.

 

The Post also reports Beijing's policymakers are worried that last year's lending splurge may result in toxic non-performing loans.

 

Citing BNP Paribas analyst Dorris Chen, the Post notes that mainland short-term bank loans are expected to average 800 million yuan a month in the first quarter, down from 1.5 trillion yuan a month, on average, in the first three months of last year.

 

But Tomo Kinoshita, Nomura's deputy head of economics for non-Japan Asia, disagrees with BNP Paribas. Kinoshita believes that credit supply would probably remain steady, says the Post.

 

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