China Tells

China’s banks are likely to continue the loose lending policy in 2010, to a less extent compared to that of 2009 (See Article from WSJ). In 2009 Chinese banks lent a total of more than 9 trillion RMB new bank loans. IT is estimated that the same banks will likely lend up to 7-8 trillion RMB of new loans in 2010. Such a lowered level from 2009 is still quite high based on historical average. To achieve that target, most banks will likely need to raise more capital through equity market or debt market. A common concern of big scale of lending obviously is the increase of non performing loans. So far Chinese banks are in a healthy state regarding NPL levels (See Graph from Chinatells). According to the analysts, it is difficult to guess the level of bad loans. In fact, banks will never have increasing NPLs as long as the stock and property market are well performed, simply because that in a bull market no one is going to default. With a healthy outlook of economic growth, there are still room for banks to continue to keep the floodgate of credit open, and such wild run could easily go on for another 5 years even if some of the asset class are heavily over priced.

中国银行明年可能继续大举借款，虽然规模可能小于2009年。据估计09年中国银行共贷出超过9万亿人民币的新贷款。目前看来2010年可能需要贷出7-8万亿，其规模仍然相当可观。大举贷款可能引发坏账率的上升，目前中国银行的坏账率处于非常低的水平，尚无坏账率上升的忧虑。