Banks give out less new loans in July(69532)

Banks give out less new loans in July

From: China Daily

Chinese banks disbursed 532.8 billion yuan ($78.7 billion) as new yuan loans in July, an indication that fresh lending would remain stable and at relatively low levels for the next five months due to the lending curbs and the economic slowdown.

New yuan lending in July represented a measured slowdown from June, when banks issued 603.4 billion yuan in such loans, according to the People's Bank of China, the central bank.

The figure is well in line with expectations, said Zhang Xiaojing, a senior economist at the Chinese Academy of Social Sciences.

By strengthening credit controls, the authorities are learning lessons from the liquidity surge of 2008, which pushed up asset prices, said Dong Xian an, the chief economist of Industrial Securities.

It could not be too high given the policymakers' consistent regulation of the economy this year, Zhang said.

He said with the economy expected to slow down this year and the curbs on the real estate sector, local government debt and highly polluting industries, the demand for credit may weaken and new yuan loan growth would not surge in the remainder of this year.

Lending for real estate sector, local government financing and sectors that heavily consume energy and resources and are highly polluting would decrease, he said.

The July figure brought new loans for the first seven months to more than 5.16 trillion yuan, compared with 7.73 trillion yuan during the same period last year.

Banks give out less new loans in July

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