China banks:Moderation in loan expansion in April

Event

Today’s PBOC data release indicates a reduction in April from the fast loanexpansion of 1Q16. Total loans expanded by just +0.5% MoM, the slowestsequential pace since Oct 2015. Total loans have now expanded by RMB4.9trillion YTD, which is 9.7% lower than the RMB5.4trn in Jan-Apr 2015. Evenstripping out FX loans, total loans YTD increased RMB5.2 trillion, +1.7% YoY.

Impact

System loans expanded +0.5% MoM / 13.0% YoY. RMB loans grew +0.6%MoM / +14.5% YoY in April, slightly slower than the Jan-Mar levels. RMBretail loans remain strong, (+1.5% MoM / +6.2% YTD / 17.9% YoY), with MLTloans (largely mortgages), growing +2.2% MoM / +8.4% YTD / +23.5% YoY.

Total deposits expanded by 0.6% MoM / 12.6% YoY. RMB deposit growth(+0.6% MoM / +12.9% YoY) also continued to outpace FX deposits.

LDR declined again, but by less than March. Total LDR was 71.3% (-8bpMoM / +28bp YoY) and 69.4% for the RMB book (flat MoM / +100bp YoY).