China September bank lending beats forecasts on stimulus boost
New bank loans in China rose more than expected in September, rebounding from August's weak figure, as policymakers stepped up support for the slowing economy. However, overall credit growth remained sluggish, with outstanding loans at a record low, signalling weak demand.
New bank lending in China rose more than expected in September, rebounding sharply from a weak August as policymakers stepped up targeted monetary support for the slowing economy, according to Reuters calculations based on data from the People's Bank of China released on Wednesday.
Chinese banks extended 1.08 trillion yuan in new loans in September, beating expectations and rising sharply from August's 60 billion yuan. Analysts polled by Reuters had expected September new yuan loans to reach 975 billion yuan, compared with 1.29 trillion yuan a year earlier. Chinese lenders typically accelerate credit issuance toward quarter-end to meet internal targets.
The central bank does not provide monthly breakdowns, so Reuters calculated the September figures based on the bank's January-September data compared with the January-August figure. The pickup in lending suggests Beijing's latest stimulus push may be gaining traction, but weak overall credit growth points to still-sluggish demand from households and businesses.
Outstanding yuan loans rose 4.8 per cent from a year earlier, a record low, and down from 4.9 per cent in August, against analysts' expectations of 4.8 per cent. New loans issued by Chinese banks totalled 11.52 trillion yuan in the first nine months of this year, down from 14.75 trillion yuan in the same period last year.
In late September, the government unveiled measures to spur growth, including targeted rate cuts and mortgage subsidies. Fitch Ratings said the policy package should modestly improve credit transmission, but it is unlikely to materially lift broader credit demand or alter the property sector's weak trajectory.
Policymakers have pledged to step up policy support to help meet an annual growth target of 4.5 per cent to 5 per cent. GDP growth slowed in the second quarter to a 3-1/2-year low, as weak investment and household consumption overshadowed strength in manufacturing and exports. China is set to release third-quarter GDP data on October 19.
Broad M2 money supply in September expanded 7.2 per cent from a year earlier, an 18-month low and below analysts' forecast of 7.4 per cent, while the narrower M1 money supply grew 3.2 per cent year-on-year, compared with 4.1 per cent in August. Outstanding total social financing rose 7.1 per cent in September from a year earlier, down from 7.2 per cent in August, with any acceleration in government bond issuance likely to boost such financing.