China Big Four Banks See Lending Drop, First Time Since 2009

Bloomberg: Lending by China's Biggest Banks Falls for First Time Since '09
Total loans by the four lenders, including Industrial & Commercial Bank of China Ltd., amounted to 35.7 trillion yuan ($5.6 trillion) at the end of October, down 65.6 billion yuan from a month earlier. That’s according to data released Sunday by the People’s Bank of China.
How can they increase lending with falling deposits, increased NPLs and a slowing economy? Their balance sheets are impaired, much worse than is publicly admitted, and they know it.

Bloomberg: Dangers Lurk in China's Online-Lending Jungle
Online peer-to-peer platforms sold a record 119.6 billion yuan ($18.8 billion) of financing products in October, according to researcher Yingcan Group. That’s equivalent to 23 percent of commercial bank lending in the month, up from 5 percent a year ago. While authorities said in July that Internet finance companies must provide sufficient disclosure and send risk reminders to customers, regulators have yet to issue specific laws.
Credit creation is moving towards the riskiest, least regulated, least stringent areas of the market——and that's saying something in China considering the big banks will take a worthless credit guarantee and slap in on a loan to call it AAA. Furthermore, whereas the big four banks concentrate risk, P2P lending spreads it far and wide across millions of households. There will be no extending and pretending for them if loans sour.

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