assistant chairman Yan Qingmin said a 15-16% loan growth this year is
sufficient to maintain stable growth. NPL will stay around 2%, not exceeding
3%. In the short term, Basel III impact on Chinese banking is limited. In the
longer term, banks need to grow off-balance sheet business (such as bankers
acceptance and guarantees) to ease pressures on capital requirement.
Yan's expectation of loan growth is very close to our views and forecasts
(about RMB7.0-7.5tn new loans this year).Current NPL ratio is only at 1.14% for
Chinese banks, so the CBRC seems to expect a mild rise in NPL ratio; Note
that the PBoC may also count the off-balance-sheet Bankers' acceptance (BA) in
the so called "Total Social Financing" and show concerns on BA.