China Bank Lending Hits Record On Corporate Loans
(RTTNews) - Chinese banks extended a record level of loans at the start of the year after the relaxation of pandemic related restrictions boosted demand for credit from the corporate sector, but household lending slowed.
Banks extended CNY 4.9 trillion in new yuan loans in January, data released by the People's Bank of China revealed on Friday. Lending was higher than the CNY 4.0 trillion economists' had expected and December's 1.4 trillion new yuan loans.
M2 broad money supply expanded 12.6 percent on a yearly basis in January, faster than the 11.8 percent increase in December. The rate was forecast to ease to 11.6 percent.
Total social financing, a broad measure of credit and liquidity in the economy, increased to CNY 5.98 trillion from CNY 1.31 trillion in December.
The PBoC will probably keep monetary conditions loose, with further policy rates cuts likely as soon as next week, Capital Economics' Julian Evans-Pritchard said.
"Coupled with the broader tailwinds to credit demand from China's reopening and regulatory easing on real estate developer financing, credit growth will continue to surprise to the upside in the near-term," the economist noted.
Loan growth is usually strong in the first quarter of the year, ING economist Iris Pang said. But this time, the jump in lending suggests that the economic recovery in 2023 has the potential to exceed the pre-pandemic level, Pang added.
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