Since The Financial Crisis, The Decline In Loans From China'S Four Largest State-Owned Banks Is The First Time.

The total loan amount of China's four largest state-owned banks has declined, for the first time since 2009.

Statistics released by China's central bank on 16 showed that as of the end of October, loans from ICBC, China Construction Bank, Agricultural Bank of China and Bank of China totaled 35 trillion and 690 billion yuan, representing a decrease of 65 billion 600 million yuan compared with September.

"The slowdown in credit growth is mainly due to banks' cautious stance on the economic outlook and asset quality."

Bloomberg quoted DBS Vickers analyst in Hongkong Chen Shujin as saying that in addition, banks may also slow down the pace of loans because they are close to completing the annual lending target.

Moreover, Wall Street's knowledge and reference point to the four largest state-owned banks in China in the three quarter.

The growth rate is less than 1%, and the net profit growth rate of joint-stock banks is mostly single digits.

Bank's three quarter financial report shows that in the first three quarters of this year, ICBC, CCB, ABC, and Bank of China increased their net profit by 0.65%, 0.73%, 0.57% and 0.79% respectively.

In the third quarter, Bank of China also saw its first net profit growth decline since 2009, down 1.5% from the same period last year.

In addition, the four banks, like other joint-stock banks, face the potential pressure of rising non-performing loans and rising bad rates.

The bad rate of ABC is as high as 2.02%, which is the only breakthrough in 2% of the four major state-owned banks. The other three banks have a bad rate of around 1.45%.

Recently, China's corporate default alert has been ringing, causing some banks to get involved.

According to Wall Street, the debt crisis of Shanshui Cement has prompted China Construction Bank and China Merchants Bank to repay their debts immediately, the amount being 50 million yuan and 494 million yuan respectively.

Before Wall Street, the article mentioned that

It is expected that the decline in interest rates may prompt some Chinese banks to increase their exposure to high-risk customers in pursuit of higher loan yields, thereby threatening their risk control capabilities in the short term.

In the next 1-2 years, the pressure of China's banking industry will rise further.

The challenges faced by the banking sector are the reflection of macroeconomic slowdown.

Even if the Central Bank cuts interest rates for the six time in a year, it will not prevent China's most widely used new credit index slid to its lowest level in 15 months in October.

Data released by the central bank on 12 showed that in October, China added RMB 513 billion 600 million yuan, which was significantly lower than the expected 800 billion yuan, less than the 1 trillion and 50 billion yuan in September.

Weak credit growth figures show that China's economy is at risk of further deceleration.

According to the data released by China Banking Regulatory Commission on the evening of 12, the profit growth rate of commercial banks in the first nine months slowed down from 13% in the same period last year to 2%.

While financial regulation relaxed and enhanced competitiveness, the provision of bad loans, narrowing of loan spreads and weak credit demand eroded bank profits.

Bad banking industry in China

And bad loan rate "double litre".

The CBRC data also showed that loans to Chinese commercial banks could increase to nearly $4 trillion ($628 billion) at the end of the three quarter.

The balance of non-performing loans is nearly 1 trillion and 200 billion yuan, and the non-performing loan ratio is 1.59%, but if the loans concerned are concerned, the two figures rose to 3 trillion and 990 billion yuan and 5.4% respectively.

This data exceeds Sweden's gross domestic product (GDP), and the potential financial risks faced by commercial banks are aggravated.

Many overseas analysts suspect that China's official NPL data is below the actual level.

Hongkong's South China Morning Post reported that the bank's renewal of debts that could not be paid on time could be a reason for the underestimation of official NPL data.

The BIS warned in September that the ratio of credit to GDP in China implied that the risk of banking crises in China in the next few years is rising.