How banks are tightening their credit policies, cherry-picking the customers most likely to deliver them highest profits as year-end nears
Shrewder sifting of corporate clients and fine-tuning of loan allocation from the nation’s most-resourceful banks in Shanghai already in full flow
An apparent shortage of bank credit in China, as the year end nears, is offering some of the industry’s largest players good opportunities to maximum profits, by shifting their credit focus to higher-profit customers, say analysts.
“We have seen credit in short supply near this year-end, partly thanks to a bigger demand from businesses when the macro economy is on a firmer footing,” said Zhao Yarui, a senior researcher at Bank of Communications in Shanghai.
“The shortage in credit is also driven by China’s deleveraging measures and a prudent monetary policy that is biased towards tightening.”
The country’s major lenders, with more liquidity on hand, can seize the year-end shortage of supply and gain an significant edge on their smaller rivals to squeeze profits, by adjusting the loan allocation as long as such efforts are in line with regulatory stance, she said.
Yang Yue, a banking analyst at China Zheshang Bank, echoed her views.
