Weihua, president of CMB: lack of real loan demand in enterprises

Weihua, president of CMB.　　CFP The new credit is concentrated in the medium and long term project loan and the bill market discounting, which shows that the real enterprise demand for loans is insufficient. ——— Weihua In spite of the explosive growth of new credit in the previous April, China Merchants Bank governor Weihua said in a keynote speech in Friday at the Chinese think-tank forum that commercial banks ' effective credit demand is continuing to weaken, and that this year's commercial bank credit is concentrated in the medium and long term project loan and Bill market discounting, This characteristic can prove the real enterprise to the loan demand is insufficient. "The overall net profit growth of China's banking sector in 2009 will be significantly slowed by the continued weakening of effective credit demand, sluggish growth in intermediary business, reduced gap in space and the pressure of allocation."　　And the counter-cyclical extraordinary credit expansion will bring great pressure to future risk management.　　Speech and the integration of Wing Lung Bank, Weihua said the target of the year's profit has been achieved in the first quarter. The pace of banking profitability will be significantly slowed as China's banking industry is still in its infancy in terms of business innovation and internationalization, the impact of the subprime crisis on China's banking sector is limited. Weihua that the biggest impact on the assets risk of commercial banks is the change of China's economic cycle. "Over the past decade, exports have contributed to China's G D p growth of 30%-40%, and the main destinations are Europe and the US." The weakening of demand in the US and Europe since last year has led to a contraction in the market and a far-reaching impact on the Chinese economy along the industrial chain, and the banks that are sensitive to macroeconomic fluctuations are not immune. "Weihua that as companies choose to reduce their liabilities in the economic downturn, the effective credit demand of commercial banks will continue to weaken, the sluggish growth in the middle business and the spatial contraction of spreads will squeeze the bank's profit margins." Because of the increasing risk, the influence of the reserve pressure on the net profit will gradually appear.　　Weihua said the net profit growth this year is sure to slow sharply relative to the 06-08 annual 30% per cent growth in China's banking sector. "This year's commercial bank credit is concentrated in the medium and long term project loan and the bill market discounting, this characteristic can confirm the real enterprise to the loan demand is insufficient."　　"Weihua said. Weihua that the adjustment of the economic cycle will make the Chinese banks, which rely mainly on wholesale business, take the opportunity to adjust, and the ability of the retail business to stabilize the banks against the economic cycle will continue to appear. "China Merchants Bank in the first quarter profit composition, the retail business to net profit contribution degree is much higher than the wholesale business, its profit growth condition also better than the wholesale business growth." This ensures that we are able to diversify the asset risks associated with the volatility of our economy as external risks continue to expand. "Weihua said, the macro-control counter-cyclical policy led by the bank's credit to the future will face arduous risk management pressure." "It is generally believed that the commercial bank assets growth rate of about 20% when its internal risk management is within reach, beyond 20% of the growth period risk management capacity will gradually decline." "The wing Lung Bank has achieved profitability in the current environment,The successful return of capital expenditure by CMB's consolidation of the high premium takeover last year will undoubtedly have a relationship with profit growth over the next few years. In response to this reporter's question, Weihua said that the integration of the wing Lung Bank will focus on the needs of their respective customer groups overlap. "More than 40% of our customers are concentrated in South China, and we have also investigated the need for cross-border services in the mainland, especially in southern China, and the Hong Kong Wing Lung Bank's clients have access to services in the mainland," he said. "To integrate the development goals of the wing Lung Bank, Weihua said the focus this year will be to turn a profit, which was achieved in the first quarter of this year." "The first quarter and the table, Wing lung on the company's overall profit contribution has been positive." "Weihua said.　　Information shows that the total loss of HK $816 million for the whole of 2008 has been due to the provision of HK $819 million for Bond-backed securities (CDS) and the depreciation of HK $316 million for structural investment vehicles (SIVs). Weihua said that the integration effect of CMB and Yong-long will gradually emerge through Cross-border settlement, Nepau Loan and other services. "Many Hong Kong companies do not have access to bank credit in the mainland, and through CMB and wing lung they can provide guarantees to the Hong Kong parent company, and CMB can make loans to its subsidiaries in the mainland." "Our correspondent Locke