Sharply lower loan growth awaits, warns analyst

Bank lending may have been up 3% in August but slower economic growth is expected to lead to higher non-performing loans.

DMG Research noted:

Loan strong in Aug, but seen to weaken going forward. Aug 11 systemic loan expanded 3% MoM, with business loans surge of 4.1% MoM being the key driver. On the other hand, consumer loans expanded a milder 1.6% MoM. Within the business segment, general commerce loans (11% loan share) was the star performer, rising 6.3% MoM. Housing loans (32% loan share) continued its expansion, although its 1.7% MoM growth was relatively mild. We expect the strong loan growth momentum to ease off in 4Q11 and into 2012, on the back of rising concerns on global economic growth.
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