March 10,2011

CBRC: Loan Growth Around 15-16% This Year

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CBRC 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.

Mr. 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.

 

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