Lending tightens in China, same expected next year

Several of China’s largest state-backed banks used up their full-year quota to lend in the first three quarters as government efforts to deleverage the financial sector deepened. According to Caixin, lenders don’t expect the credit situation to ease next year. Industrial and Commercial Bank of China and the Agricultural Bank of China both ran out of their loan quotas for this year of 850 billion yuan ($128 billion) and 800 billion yuan, respectively, in the first nine months. They both have had to ask the central bank to lift their caps and are expecting new loans issued by each of them to hit around 900 billion yuan this year. China Construction Bank and Bank of China are facing similar problems, according to sources close to the senior management of the banks. Looking ahead, banks widely expect their loan quota, decided by the PBOC, to stay similar in 2018.