Banks lend below market estimates
Print Edition
Banks in China lent below market expectations in February as economists blamed a weak business momentum and the central bank’s guidance on risk control.
China’s new yuan-denominated lending totaled 644.5 billion yuan (US$105 billion) in February, less than half of a four-year high of 1.32 trillion yuan seen in January, the People’s Bank of China said yesterday. But the lending was 24.5 billion yuan higher than the same month of last year.
The market had expected about 700 billion yuan in new yuan lending.
M2, the broad measure of money supply covering cash in circulation and all deposits, added 13.3 percent year on year, 1.9 percentage points faster than a year earlier but 0.1 percentage points slower than January.
“The relatively weak lending and money supply in February reveals a reality of low demand and capital outflow from China,” said Xue Hexiang, an analyst at Guotai Junan Securities Co.
“The economy may still slow down unless there is a stimulus. But we don’t see any central bank intention to relax monetary policies in the short term.”
Total social financing, the broadest measure of credit supply including loans, bank acceptance bills, corporate bonds and equity financing, totaled 938.7 billion yuan, down 131.8 billion yuan, or 12.3 percent, from a year earlier.
Combining January and February, the figure was 70 billion yuan lower than the same period of last year.
“The central bank’s efforts in controlling banks’ nonstandard assets are taking effect as the size of trust loans is shrinking, and banks are capping their off-balance sheet assets to tame risks,” said Zhong Zhengsheng, an analyst of Guosen Securities.
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