China banks June credit data - demand weakness and loan pricing pressure persists

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China banks June credit data - demand weakness and loan pricing pressure persists

Asia Pacific Equity Research

15 July 2026

China banks

June credit data - demand weakness and loan pricing

pressure persists

The June credit data shows a consistent narrative of resilient production and weak Banks & Financial Services

consumption, as highlighted by our macro team (link). Both TSF and new loans AC Katherine Lei

missed expectations, with continued deceleration in credit growth. Our take is (852) 2800-8552

negative on a net basis. First, new loans continue to disappoint, with retail lending katherine.lei@jpmorgan.com

contracting 1.3% y/y in June. Second, pricing for new corporate loans contracted J.P. Morgan Securities (Asia Pacific) Limited/

sequentially and on a y/y basis; this, along with mix deterioration in 2Q, will add J.P. Morgan Broking (Hong Kong) Limited

pressure to the banks’ overall loan yield, offsetting the benefit from time deposits Peter Zhang

re-pricing. Third, weak demand suggests pressure on the overall economy; asset (852) 2800-8557

quality of retail loans will likely remain under pressure. In addition, remarks at the peter.zhang@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/

PBOC press conference suggest that addressing weak loan growth is a low policy J.P. Morgan Broking (Hong Kong) Limited

priority, as policymakers shift their focus from quantity-based to price-based Lincoln Yu

policy management. Thus, we prefer high-quality banks with earnings resilience. (852) 2800 8523

We like CCB, BOC and ICBC among SOE banks, and Citic and CMB among lincoln.yu@jpmorgan.com

JSBs. J.P. Morgan Securities (Asia Pacific) Limited/

J.P. Morgan Broking (Hong Kong) Limited

What we don’t like about the credit data Haomin Chen

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