China targets CNY9t new loans for FY13

It's up from the CNY8t target in FY12.

According to Barclays, while the China Central Economic Work Conference did not give out any official new loans target, and just stated that the country will “properly expand the amount of social financing to maintain a moderate increase in loan issuances”, the state-run Shanghai Securities News reported that China’s new CNY loans target for FY13 would be set at CNY9t, up CNY500-800b from CNY8-8.5t loans target for FY12.

Here's more from Barclays:

Market has expected a loans target of CNY8-8.5t for FY13, so this new loans target is higher than market expectation.

Analyst comment:

§ Assuming a new loans target of CNY9t for FY13, the total loan growth would reach 14.3%, lower than our estimated FY12 loan growth of 15.0%. New loan amount will be 10% lower than the CNY8.2t FY12.

§ The rate of loan growth (14.3%) would be the lowest since 2006, but in terms of absolute figure, this new loans target (CNY9t) is the second largest over the past years, only behind the CNY9.6t in FY09.

§ In the six mainland banks we covered, our estimated aggregate new loans would amount to 3.9t for FY13, accounting for 43% of CNY9t new loans target. The loan growth of six banks would be 13.4%, slightly lower than the new loan target.

§ Note that there will be some divergence between the projected new loan figures for the six banks that we cover, and the PBOC figures. The reasons behind include: 1) PBOC figures count only CNY loans, while our figures include loans in foreign currencies as well. 2) PBOC figures are on gross loans, while our figures are on net loans (after allowance for bad debts).