Mortgages Down, Short-Term Corporate and Household Lending Up in June

Corporate borrowing (SOEs?) offset the drop in household borrowing in June. Mortgages fell to 31 percent of total lending, down from 41 percent in June 2016. July will be interesting. Last year, mortgage lending was more than 100 percent of total bank lending in July.

ZH: China Creates A Quarter Trillion In New Loans But Analysts Are Worried: "It's Not Enough"

Looking at the breakdown, corporate loans rebounded to CNY695bn from CNY609bn a year ago, with long-term corporate loans coming in at CNY578bn (year ago: CNY411bn) and short-term loans rising to CNY274bn (year ago: CNY198bn). Household loans remained strong in June, registering CNY738bn, compared with CNY712bn a year ago, of which short-term household loans rose to CNY261bn (year ago: CNY138bn). We note long-term household loans (mostly mortgage loans) slowed to CNY483bn, from CNY564bn a year ago. We continue to expect long-term household loans to soften given the PBoC's further guidance to commercial banks to raise mortgage rates and lower loan-to-value ratios recently.