China new bank loans hit record in Jan as central bank eases policy

[BEIJING] New bank lending in China more than tripled in January from the previous month, beating forecasts and hitting a record high, as the central bank seeks to shore up slowing growth in the world's second-largest economy.

Chinese banks extended 3.98 trillion yuan (S$840 billion) in new yuan loans in January, up from 1.13 trillion yuan in December, according to data released by the People's Bank of China on Thursday (Feb 10).

Chinese lenders tend to front-load loans at the beginning of the year to get higher-quality customers and win market share.

Analysts polled by Reuters had predicted new yuan loans would soar to 3.69 trillion yuan in January. The new loans were higher than 3.58 trillion yuan a year earlier.

China's economy cooled over the course of last year and faces multiple headwinds as a property downturn hurts investment and the country's efforts to contain local cases of the highly contagious Omicron variant weigh on consumption.

The central bank has cut reserve requirement ratios (RRR) for banks and benchmark lending rates, and more easing steps are expected.

Authorities have been marginally easing financing curbs for property developers and speeding up mortgage issuance for home buyers.

Household loans, mostly mortgages, rose 843 billion yuan in January from 371.6 billion yuan in December, while corporate loans surged to 3.36 trillion yuan from 662 billion yuan.

Broad M2 money supply in January grew 9.8 per cent from a year earlier, central bank data showed, above estimates of 9.2 per cent forecast in the Reuters poll. It rose 9.0 per cent in December.

Outstanding yuan loan grew 11.5 per cent from a year earlier compared with 11.6 per cent growth in December. Analysts had expected 11.6 per cent growth.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 10.5 per cent in January from a year earlier and from 10.3 per cent in December.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In January, TSF jumped to 6.17 trillion yuan from 2.37 trillion yuan in December. Analysts polled by Reuters had expected January TSF of 5.46 trillion yuan. REUTERS