The Chinese banking sector experienced a slowdown in the past months due to ongoing fears of a liquidity crunch from bad loans, leading the amount of wealth management money invested to fall short of expectations.

 

The balance for wealth management plans figured at RMB9.85 trillion ($1.6 trillion) as of 30 June 2013, said the China Banking Regulatory Commission at a press conference. 

 

Non-standard credit assets, which include credit loans, letters of credit, trust loans, accounts receivables, equity financing under repurchase agreements, totalled RMB2.7 billion, down 7 per cent from March. Also, while the money for trust assets figured at RMB9.45 trillion, the monthly growth rate had dropped from 5.2 per cent in January 2013 to 0.44 per cent in June. 

 

On the upside, actual bank liquidity has normalised. The loan-to-deposit ratio was at 72.43 per cent and the reserve requirement ratio managed to stay above 20 per cent in the month. The China Banking Regulatory Commission is currently moving to tighten regulations over financial services to safeguard the economy from risks.