Chinese banks are directing credit to the real economy during the recovery


BEIJING, Sep 8 (Xinhuanet) – China’s six major banks increased loan support to real economy sectors in the first half of the year (H1) as demand continued to unleash amid solid recovery momentum.

The latest semi-annual reports from the six largest state-run commercial banks show that each of the four largest lenders paid more than one trillion yuan (approx.

Corporate demand for credit was further unleashed as epidemic control efforts took hold and economic fundamentals maintained an upward momentum, said Wang Jiang, head of China Construction Bank (CCB).

With the optimized structure of the loan offer and the more targeted and precise financing of financial services, the banks have made a positive contribution to the recovery of the real economy, according to industry experts.

The Industrial and Commercial Bank of China (ICBC) took the lead in directing loans to small and micro businesses, followed by the Agricultural Bank of China (ABC) and the Bank of China (BOC).

The growth rate of the inclusive loans issued by the ICBC was 40.4 percent in the first half of the year, while that of ABC and BOC was also over 30 percent.

In the context of the Chinese CO2 targets, green credits grew strongly. In late June, the ICBC, ABC, BOC and CCB all reported green loan balances of more than a trillion yuan.

Lenders also increased financial support for strategic emerging industries, led by the BOC. The bank saw lending to the sectors grow 83.5 percent since late last year.

Zhang Qingsong, head of the ABC, said the bank had increased lending to revitalize rural areas. In late June, the bank reported that the balance of borrowing to counties was 5.9 trillion yuan.

Based on the principle that “houses are there to live, not speculate” and the country’s regulatory scrutiny to prevent and mitigate financial risks, lending to China’s real estate sector expanded more slowly in the first six months.

Official data shows that home loans outstanding at the end of June rose 9.5 percent year over year to 50.78 trillion yuan. According to the banks, the new credit quotas were mainly used to meet residents’ demand to buy their own home to live in.

In the next six months, lending will maintain a steady growth dynamic, while the credit structure will be further optimized, according to the banks.

With credit demand robust for rural regeneration, green economy and advanced manufacturing, the Bank of Communications will increase project reserves for these sectors, said Liu Jun, chief executive of the bank.

Banks also emphasize personal loans during the period. Postal Savings Bank of China said it would provide more credit to retail businesses, with an emphasis on agricultural projects and small and micro-credit.

The ABC will provide financial assistance to county-level regions, private companies and manufacturing sectors that have no cash inflow, Zhang said.

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