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New yuan lending slows but social financing surges
By Hu Xiaocen |
January 10, 2013, Thursday
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NEW lending in Chinese yuan expanded at the slowest pace in three years in December, while social financing remained stable thanks to soaring trust loans, the central bank said today.
New lending made in December totaled 454 billion yuan (US$72 billion), short of the market expectation of 500 to 600 billion yuan. Trust loans increased to 246 billion yuan, the second-highest growth in the year after January.
Social financing including loans, bank-accepted bills, corporate bonds and equity financing totaled 1.63 trillion yuan, 351 billion yuan more than a year earlier, the People's Bank of China said on its website.
"It's good news that social financing surged 26 percent year-on-year in December, up from 19 percent in November," Dariusz Kowalczyk, senior economist for Asia except Japan at Credit Agricole, said in a research note today. "This was possible despite a surprisingly sharp contraction in new yuan lending, by 29.8 percent annually. As was the case earlier in the year, other forms of funding the economy have gained importance, with trust loans up 532 percent and foreign currency loans up 210 percent."
"Solid funding means continued fast growth of the GDP in the near term and should be positive for sentiment if investors manage to look past the lending numbers," he added.
For the whole year, social financing added 2.9 trillion yuan to 15.8 trillion yuan in 2012. Funding supported by yuan bank loans fell 6.1 percentage points to 52.1 percent, while trust loans rose 6.6 percentage points to 8.2 percent.
"We haven't seen much of a rise in new lending over the past 12 months, as the government was reluctant to repeat the 2009 lending ease this time," Moody's said in a report today. "The lending lift that we saw through the middle of 2012 has now cooled and we are likely to see only flat lending activity in the coming months."
New lending made in December totaled 454 billion yuan (US$72 billion), short of the market expectation of 500 to 600 billion yuan. Trust loans increased to 246 billion yuan, the second-highest growth in the year after January.
Social financing including loans, bank-accepted bills, corporate bonds and equity financing totaled 1.63 trillion yuan, 351 billion yuan more than a year earlier, the People's Bank of China said on its website.
"It's good news that social financing surged 26 percent year-on-year in December, up from 19 percent in November," Dariusz Kowalczyk, senior economist for Asia except Japan at Credit Agricole, said in a research note today. "This was possible despite a surprisingly sharp contraction in new yuan lending, by 29.8 percent annually. As was the case earlier in the year, other forms of funding the economy have gained importance, with trust loans up 532 percent and foreign currency loans up 210 percent."
"Solid funding means continued fast growth of the GDP in the near term and should be positive for sentiment if investors manage to look past the lending numbers," he added.
For the whole year, social financing added 2.9 trillion yuan to 15.8 trillion yuan in 2012. Funding supported by yuan bank loans fell 6.1 percentage points to 52.1 percent, while trust loans rose 6.6 percentage points to 8.2 percent.
"We haven't seen much of a rise in new lending over the past 12 months, as the government was reluctant to repeat the 2009 lending ease this time," Moody's said in a report today. "The lending lift that we saw through the middle of 2012 has now cooled and we are likely to see only flat lending activity in the coming months."
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