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Economy · Business · Money Mkt
ICBC extends USD 1.4 bln in financing to private firms under increasing govt pressure
CKN
2018/11/13 06:22:09
2,387
China's Financial News, China News, ICBC

Nov 13, 2018 (China Knowledge) - The Industrial and Commercial Bank of China (ICBC) has penned hundreds of agreements with Chinese firms over the last month, extending nearly USD 1.4 billion worth of loans to these private companies.

The number of loans issued during this period grew by more than 5%, making up 80% of the bank’s total financing business clients. The loans currently have an outstanding of USD 302 billion with an average interest rate of 5.1%. ICBC will continue to issue additional loans to small and medium enterprises (SMEs) in China which may be worth up to a few billion U.S. dollars annually.

The move by ICBC comes at a time when the Chinese economy is facing a wider de-leveraging campaign and tightening of credit, making it difficult for SMEs to obtain loans. The Chinese government has since tried to promote loans to these companies, even going so far as to set formal goals for banks such as allocating a portion of their new loans to privately-owned companies.

Amid a backdrop of an escalating Sino-U.S. trade war, rising corporate defaults and a falling stock market, the moves by the government have led to bank stocks falling across the board on fears that the pressure from the government to issue more loans will only result in bad loans. ICBC’s share price on the Shanghai Stock Exchange has fallen by 3.7% since last Thursday 8th November.

 

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