Central Planning Redux: PBoC Sets 1Q Lending Target Below Q4 Level

iFeng: 知情人士:央行明确控制一季度新增贷款 低于去年四季度
Reluctant to be named Informed sources had said that because of credit growth too fast, the Chinese central bank made it clear that commercial banks must strictly control the first quarter of new loans. In principle, a quarter of the total amount of new housing loans and growth rate is lower than the fourth quarter of last year.
This may explain why small and medium banks in Shanghai, as one anecdotal example, are encouraging early repayment of existing mortgages. The article goes on to discuss the tightening:
Today, "China Securities News" quoted in the front page article quoted a number of analysts, taking into account the steady exchange rate, financial deleveraging, control the real estate bubble and inflationary pressures, this year's monetary control has continued to tighten the possibility.

Minsheng Bank Research Institute of Financial Development Research Center, said Wang Yifeng, deputy director of commercial banks to raise mortgage interest rates is the market of the autonomous behavior. Since 2016, various types of housing loans booming demand and supply, especially in large amounts of personal mortgage loans, but according to estimates, the first set of mortgage loans as a result of more discounts, the overall pricing is low, affecting bank returns.

"Considering this year the market demand for mortgage loans is still strong, the company demand for loans to pick up, coupled with the central bank raised the short-term capital costs and other factors, some commercial banks in the initiative to optimize pricing behavior, the lower the pricing of the first set of mortgage Loans to internal requirements, the market this year, the overall pricing of mortgage prices higher than last year, which is conducive to stabilizing the bank net interest margin, "he said.

Hai Tong Securities in today's report that, from the perspective of bank asset allocation, if the mortgage risk capital account for the factors taken into account, the current mortgage interest rates and bond yields are still relatively low. To improve returns, it is estimated that discounted mortgages will all disappear in the future. "In the mortgage market, interest rates have also begun, and will continue," the report said.
The article references this Bloomberg article from January 25. China Said to Order Banks to Curb New Loans in First Quarter

Related from SCMP: Mortgage draw downs slow to a trickle as China tightens credits
Chinese commercial banks are slowing the ability of their borrowers to draw down on their loans, amid a directive by the People’s Bank of China to tighten the disbursement of credit to keep property prices in check and prevent capital flight.

One of Bank of Communications’ Shanghai branches delayed the drawdown of a 1.5 million yuan mortage loan -- approved at the end of 2016 -- by three months until March, according to a borrower who declined to be named. The bank’s branch declined to comment.

Similar delays of between three to four months have been reported across the city at the China Merchants Bank and the Industrial & Commercial Bank of China, according to bank customers. Officials at both banks declined to comment.

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