The government has moved to rein in lending this year, while insisting that "reasonable" amounts of credit will remain available, but analysts said banks might look to boost their quarterly interest earnings anyway through untraceable alternative lending.
The China Banking Regulatory Commission (CBRC) denied recent media reports that it had prohibited banks from lending for the rest of January at the Asia Financial Forum in Hong Kong, the 21st Century Business Herald reported Wednesday.
Major commercial banks had received oral notification from regulators Tuesday asking them to withhold new loans and even bill financing, the China Securities News reported Wednesday, citing unidentified sources.
Chinese banks lent 1.1 trillion yuan ($161.05 billion) in the first half of January, Reuters reported Wednesday, also citing unnamed sources.
Banks usually lend as early as possible so their quarterly interest earnings will be booked in the same year, said Zhang Youxian, an analyst at the Bank of China’s Institute of International Finance.
But this may push banks to bypass policy and take other forms of lending not recorded in their books, which are untraceable by regulators, said Wen Chunling, associate director of Fitch Ratings China, a leading credit rating agency.
Alternative means of extending loans could include packing and selling the assets to other financial institutions or even smaller banks to lend, and buying them back later, a practice very popular in the second half of 2009, she said.
In this practice, banks usually sign two contracts with their counterparts, one for the sale and the other for repurchase. These items are usually not booked and are therefore difficult for regulators to find, Wen said.
Though the CBRC forbids banks from repurchasing their sold-out assets, it might be still difficult for banks to suppress their zeal to engage in such activities, she said.
New bank loans last year hit an unprecedented total of 9.59 trillion yuan ($1.4 trillion) in the wake of the global financial crisis.
After banks reportedly extended an alarming 600 billion yuan ($87.85 billion) in new loans in the first week of January, financial regulators stepped up interventions through "window guidance," a rise in yields for central bank bills, and a 0.5 percentage point increase in the reserve requirement rate in the following two weeks.
If they continued at such a pace, total new loans would surpass the 1.62 trillion yuan ($237.19 billion) lent in January 2009, "which is terrifying," Wen said.
The market expected many more measures from financial regulators to rein in bank lending this year, Wen noted.
"To manage expectations of inflation, the policy makers could not tolerate the aggressive lending like last year’s," said Lu Zhengwei, chief economist of the Industrial Bank.
But the "more the market expects inflation, the more government is willing to curb the loose lending, the more banks worry about new tightening measures, and the more they tend to expedite their lending," Wen said.
Overall mild prices globally will not lead to high inflation this year, Lu said, estimating inflation could reach 2.2 percent
责任编辑：sealion1986
