China banks' new loans rebounded to RMB857.2b in September

Recovering in a tough environment.

Personal and corporate short-term loans led the way as new loans rebounded from RMB702.5b in August to RMB857.2b in September.

According to a research note from CCB International, new personal medium- to long term-loans loans were RMB171b in September, down from RMB189b in August, implying mortgage loans are also slowing.

The report noted, though, that even in light of this, banks are still supportive of mortgage loans and the PBOC recently relaxed guidelines on mortgage loan lending.

CCB International expects mortgage pricing to decline moderately.

However, the increase in the mortgage loan quota is likely to be limited as mortgage loan growth is already high er than general loan growth.

Here's more from CCB International:

The PBOC asked banks to reduce deposit fluctuations. This led to a further slowdown in deposit growth from 10.1% in August to 9.3% in September.

New deposits in September came to RMB924b, much lower than the level in previous months.

Along with the new regulations to reduce deposit volatility, we expect the PBOC to relax the loan-to-deposit ratio regulation in order to prop up loan growth.

Total social financing (TSF) rebounded from RMB957.4b in August to RMB1,050b in September after a rebound in new loans and equity issuances (more active IPO activities).

However, trust loans and non-discounted bank bills shrunk further on a MoM basis due to tightening by the CBRC, which is clamping down on shadow banking.