BEIJING China's central bank could target 9 trillion yuan ($1.4 trillion) in new local currency loans in 2013, up from an expected 8.4-8.5 trillion yuan this year, the Bank of Communications (BoCom) (601328.SS) (3328.HK) said on Wednesday.
"We expect the targeted new renminbi (yuan) loans for 2013 will be 9 trillion yuan, but the actual new loans could slightly exceed the target," the country's fifth-biggest lender said in a research report, released at a news conference.
"Demand for loans in the real economy could show steady growth. We expect the new government to unleash new investment plans, which will boost credit demand," BoCom said, adding that it was unlikely that the central bank would ease policy aggressively next year.
There was even a risk that interest rates would rise towards the end of next year, if an anticipated rebound in economic growth combined with a fresh rally in commodity prices to ignite inflation, BoCom chief economist, Lian Ping, told Reuters.
"If economic growth is good in the second half next year, we cannot entirely rule out the possibility of a small rise in interest rates in Q4," he said.
Chinese banks made 7.75 trillion yuan in new loans in the first 11 months of 2012, exceeding the 7.47 trillion yuan's worth lent in all of 2011 and approaching the 8 trillion yuan level that sources said earlier in the year was the 2012 target.
Total new loans could hit 8.4-8.5 trillion yuan this year, Lian said.
The central bank sets new loan targets but does not make the details public.
Sources have told Reuters that the government will set a 14 percent target on M2 money supply growth next year, along with annual economic growth target of 7.5 percent.
Lian forecast China would grow around 8-8.5 percent in 2013.
China's total social financing aggregate, a measure of overall credit conditions in the economy used by Beijing's policymakers, could hit 16.5-17.5 trillion yuan, Lian said.
Total social financing is on course to hit a record of 15 trillion yuan this year, up 17 percent on 2011.
Outstanding non-performing loans (NPLs) of Chinese banks could grow 70-90 billion yuan in 2013, but the average NPL ratio will be stable at the end of next year from 0.95-1 percent expected at end-2012, BoCom said.
Annual growth of combined net profits of Chinese banks are like to slow to 7-8 percent in 2013 from an expected 17 percent this year, it said.
Banks face narrowing interest rate margins as regulators gradually free up both lending and deposit rates.
(Reporting by Kevin Yao; Editing by Nick Edwards and Jacqueline Wong)