Chinese banks may have extended 1.1 trillion yuan (US$177.26 billion) in new loans in June, 14.1 percent more than in May, China Securities Journal reported Monday, citing estimates by the financial research center of Bank of Communications Co. Ltd. (BoCom).
Loan demand was fueled by an improvement in the economy and the manufacturing industry, according to the bank. Also helping the loan growth was abundant interbank capital, which got a boost due to the central bank’s fund injection through market operations and its previous move to lower the deposit reserve ratios for some banks.
Meanwhile, M2, the broadest measure of money supply, is expected to have grown 13.5 percent year on year at the end of June, compared to 13.4 percent in May.
BoCom sees bank loans issuance accelerating in the second half of the year before slowing later. Total loans for the year are expected to reach 10 trillion yuan, up 14 percent from 2013, while M2 growth at year-end is seen at 13.5 percent. Some industry insiders expect the government to further ease its grip on bank loans and adjust the deposit-to-loan ratio policy.
Guotai Junan Securities Co. Ltd. estimates new bank loans in June to be 920 billion yuan, while M2 growth is seen at 13.5 percent.
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