Chinese banks' new loan growth reaches RMB 700b in July

It's 15% below the average H1 monthly run-rate.

According to Bernstein Research, new loan growth during the month was RMB 700 billion, 9% above market expectations but still 15% below the average H1 monthly run-rate.

Here's more from Bernstein:

Medium- and Long-term loan issuance was very strong in July (the highest in 4 months), offsetting the recent weakness in the issuance of corporate bonds and trust loans.

Since the SHIBOR spike in June, the disintermediation has weakened as banks have accounted for a much greater portion of total credit formation over the past 2 months. We believe this bodes well for the banks' Q3 earnings as MT&LT loans enjoy higher yields than short-term loans.

Mortgage loan growth remained strong in June at RMB 143 billion as mortgages now account for 14.0% of the banks' loan portfolio, an all-time high.