Big state-owned lender Postal Savings Bank of China (PSBC) saw new loans in the first half of 2022 rise to a record high, amidst a push from regulators for Chinese financial institutions to provide greater support to the real economy.
PSBC saw loan growth of 537 billion yuan in the first half of 2022, for an increase of 60.8 billion yuan compared to the same period in 2021, according to the lender’s mid-year results.
86% of PBOC’s loan book consisted of credit provided to the real economy, while lending to companies increased 80 billion yuan compared to the same period last year, for year-on-year growth of 16.64%.
PSBC president Liu Jianjun (刘建军) said that the big state-owned lender continued to face the challenge of insufficient demand for loans amidst uncertain conditions for the Chinese economy. PSBC had nonetheless completed most of its lending quota for 2022, leaving it well-positioned to satisfy regulatory target for the year.
“In the second half loan extension will continue to face certain challenges, but we are still confident of completing the full year loan growth target,” Liu said.
“Because PSBC has already completed over 70% of its lending schedule, there will be less pressure to make loans in the second half.
“A more important issue is maintaining the stability of interest rate spreads, and for this reason we will continue to strengthen adjustments to the lending structure.
“At the same time, on the liabilities side, we will continue to drive reductions in debt costs, especially when it comes to increasing the share of demand deposits and expanding the appeal of wealth management products. We will also continue to put pressure on the scope and rates for medium and long-term deposits.”
In the first half of 2022 Chinese banks saw the weighed average rate for new ordinary loans fall by 44 basis points compared to the same period last year, for their lowest level on record.