June 27 – The quality of China's banking assets is overall stable, with risks under control, the China Securities Journal reported, citing Liu Hongyu, an official of the China Banking Regulatory Commission. Non-performing loans won't fluctuate much in the future, the journal cited Liu as saying. Most of the bad loans come from overcapacity sectors such as steel trade, manufacturing and retail, while bad loans are more concentrated in the Yangtze River Delta.
Source: Nomura Market Research
June 26 – China's four biggest state-owned banks made 290 billion yuan worth of loans in the first 3 weeks of June. The total deposit at the four banks declined by 200 billion yuan during the same period.
Source: 21st Century Business Herald
June 24 – China's central bank no longer tolerates banks taking advantage of the interbank market to boost yields or funding, as part of its effort to get the banks ready for interest rate deregulation. Business climate for Chinese banks is expected to remain challenging with rising credit cost and slowing earnings growth in the near term.
Source: Nomura Silver Lining Still Some Way Away
June 18 – China should gradually cut the lending rate floor and raise the deposit rate ceiling for fully market-oriented interest rates, China central bank adviser Chen Yulu wrote in an article in China Finance magazine. China plans to make the Renminbi a global currency in 30 years, and the central bank should focus on both inflation and financial stability, instead of only targeting short-term price stability, Chen argued.
Source: Nomura China/Hong Kong Financials
June 17 – Outstanding local government debt in China is likely to have topped 12.1 trillion yuan as of the end of 2012, or 23.3% of GDP. This is based on the results released by the State Audit Office that outstanding local government debt in 36 provincial or prefectural governments grew 12.9% from 2010 through 2012, or an annualized rate of 6.3%.
Source: HSBC First Light Asia
June 17 – The 20 financial leasing companies tracked by the China's banking regulator posted a combined 10 billion yuan in net profits in 2012 after growing more than 100% annually during the past 5 years, according to the banking regulator's assistant chairman Yang Jiacai. Total assets of the 20 companies amounted to 840 billion yuan as of March 2013. Nomura believes financial leasing might become a new source of financing for corporate China.
Source: Nomura China/HK Financials
June 9 – Chinese banks reported 667 billion yuan in Renminbi-denominated loans in May 2013, with outstanding loans up 1% month on month and 14.5% year on year to 67.2 trillion yuan. Deutsche Bank attributed the weaker than expected new lending data to timing differences and expect it to rebound in the coming months, given the continued improvement in banking system liquidity. The banking system attracted 7.55 trillion yuan in deposits in January-May 2013, up 67.4% from the same period of 2012.
Source: People's Bank of China
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