trending Market Intelligence /marketintelligence/en/news-insights/trending/_X59LIc5Bopwxkv3KLDMmg2 content esgSubNav
In This List

Moody's: China's call for more bank lending to private firms is credit negative

Blog

Insight Weekly: Bank boards lag on gender parity; future of office in doubt; US LNG exports leap

Blog

Insight Weekly: Job growth faces hurdles; shale firms sit on cash pile; Africa's lithium future

Podcast

Street Talk | Episode 99 - Higher rates punish bond portfolios, weigh on bank M&A

Blog

Insight Weekly: Loan growth picks up; US-China PE deals fall; France faces winter energy crunch


Moody's: China's call for more bank lending to private firms is credit negative

Chinese government's call for more bank lending to privately owned enterprises is credit negative for banks' asset quality given higher loan delinquencies among such companies focused on cyclical sectors and other risks, Moody's said.

The rating agency said privately owned enterprises and micro and small enterprises focused on cyclical sectors such as manufacturing, real estate, and wholesale and retail have experienced higher loan delinquencies amid China's slowing economy. It expects the debt-servicing capacity of borrowers in these cyclical sectors to remain vulnerable to a slowing economy.

Moody's, however, said Chinese commercial banks are in a good position to mitigate the potential rise in asset risk associated with increased lending to privately owned enterprises, given the improvement in their loan underwriting standards and risk management.