This will be driven by infrastructure loans, residential mortgages, and personal consumption loans.
China Construction Bank (CCB) has an optimistic outlook for 2018. Loans are expected to grow by 7.1% for 2018 driven by infrastructure loans, residential mortgages, and personal consumption loans, UOB Kay Hian reports.
UOB Kay Hian expects the loan quota to remain at $134b (Rmb850b) and to be allocated between corporate banking and personal banking.
Here's more from UOB Kay Hian:
For corporate banking, CCB will focus on its strength in infrastructure loans. For personal banking, CCB sees growth from residential mortgages targeted at tier-1 and tier-2 cities and its consumption loan branded as Rapid Personal Loan Online.
CCB sets stringent criteria for approval of Rapid Personal Loan. Only existing customers with payroll account, provident fund account, residential mortgages and AUM of at least Rmb2m with CCB are pre-selected. Rapid Personal Loan expanded 110% hoh to Rmb158b in 1H17, accounting for 3.3% of total personal loans, and could double again to almost Rmb300b in 2H17. Residential mortgages and credit card loans also grew by 14% and 20% ytd respectively in 9M17.
Asset quality has improved for manufacturing and wholesale & retail sectors, especially in the Yangtze River Delta and Pearl River Delta regions. 90-day overdue loans/NPL is healthy at 69.1%. CCB is the only bank with NPL exceeding total overdue loans. The gap between NPLs and overdue loans is set to further widen because CCB is conservative in recognition of NPL.
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