China bank loans rise more than expected in Nov, credit growth eases

[BEIJING] China's new bank loans rose more than expected in November while broad credit growth eased, as the central bank maintained a accommodative stance to amid the global pandemic.

Chinese banks extended 1.43 trillion yuan (S$293.28 billion) in new yuan loans in November, data from the People's Bank of China (PBOC) showed on Wednesday, rising from October and beating analysts' expectations.

Analysts polled by Reuters had predicted new yuan loans would rise to 1.40 trillion yuan in November, from 689.80 billion yuan in October.

Lending in China usually rebounds in November from a seasonal retreat in October, when a week-long National Day holiday falls.

Banks have already doled out 16.95 trillion yuan in new loans in the first 10 months, surpassing an annual record of 16.81 trillion yuan in 2019.

The central bank has rolled out a raft of emergency easing measures since February to cushion the economic blow from the pandemic and tough measures to contain it.

But with economic activity rebounding, analysts like those at Nomura believe policymakers have shifted from a "wartime mode" to a "wait and see" approach.

Markets are wondering when authorities may start to withdraw stimulus and slow credit growth, but most analysts believe such a process would be gradual as long as the global economic outlook remains shaky.

China is unlikely to tighten its monetary policy soon, even though an economic recovery could gain steam in coming months, Xu Xianchun, a former vice-head of the National Bureau of Statistics, told Reuters earlier this week.

Beijing has been relying more on fiscal stimulus to weather the downturn, cutting taxes and allowing local governments to issue more bonds to fund infrastructure projects.

Broad M2 money supply in November grew 10.7 per cent from a year earlier, quickening from a 10.5 per cent rise in October and topping analysts' forecast of 10.5 per cent.

Outstanding yuan loans grew 12.8 per cent from a year earlier, easing from a 12.9 per cent rise in October. Analysts had expected 12.9 per cent growth.

Most China watchers prefer to focus on annual growth figures, which are a better guide to underlying trends than highly seasonal monthly readings.

Annual growth of outstanding total social financing (TSF), a broad measure of credit and liquidity, eased to 13.6 per cent in November from 13.7 per cent in the preceding month.

TSF rose to 2.13 trillion yuan from 1.42 trillion yuan in October. Analysts had expected 2.075 trillion yuan.

REUTERS