New loans slide to 10-month low
By Feng Jianmin |
August 11, 2012, Saturday
|
Print Edition
Print Edition
Chinese banks in July lent the least in 10 months, dampening wishes of a modest recovery and fueling speculation the central bank may cut reserve requirements for banks as soon as this weekend to bolster the economy.
New yuan loans last month amounted to 540.1 billion yuan (US$85 billion), 48.5 billion yuan more than a year earlier. Still, the figure was the lowest since September, data released yesterday by the People's Bank of China showed.
The amount was 379.7 billion yuan less than June and was well below market expectations of around 690 billion yuan.
The broad M2 money supply rose 13.9 percent last month from a year ago, the central bank said, 0.3 percentage point faster than June and roughly meeting this year's target of 14 percent.
"The money supply was slightly faster than June but new lending was far below expectations," said Qu Hongbin, chief economist of HSBC China. "Bank lending is not active enough to support investment."
He said more interest rate and reserve requirement cuts are needed to stabilize the economy. Qu added the central bank may cut the reserve requirement ratio as soon as this weekend.
E Yongjian, a researcher with the Bank of Communications, said long-term lending to companies remained a small fraction of total lending, indicating low sentiment among businesses.
"The weakness is in line with disappointing investment and industrial output data for last month," he said. "It shows that stimulus policies have not taken effect yet."
Total social financing, including loans, bank acceptance bills, corporate bonds and equity financing, was 1.04 trillion yuan last month, compared with June's 1.78 trillion yuan and May's 1.14 trillion yuan.
Net fundraising through corporate bonds reached 248.7 billion yuan in July, exceeding the first half's average by around 100 billion yuan.
New yuan loans last month amounted to 540.1 billion yuan (US$85 billion), 48.5 billion yuan more than a year earlier. Still, the figure was the lowest since September, data released yesterday by the People's Bank of China showed.
The amount was 379.7 billion yuan less than June and was well below market expectations of around 690 billion yuan.
The broad M2 money supply rose 13.9 percent last month from a year ago, the central bank said, 0.3 percentage point faster than June and roughly meeting this year's target of 14 percent.
"The money supply was slightly faster than June but new lending was far below expectations," said Qu Hongbin, chief economist of HSBC China. "Bank lending is not active enough to support investment."
He said more interest rate and reserve requirement cuts are needed to stabilize the economy. Qu added the central bank may cut the reserve requirement ratio as soon as this weekend.
E Yongjian, a researcher with the Bank of Communications, said long-term lending to companies remained a small fraction of total lending, indicating low sentiment among businesses.
"The weakness is in line with disappointing investment and industrial output data for last month," he said. "It shows that stimulus policies have not taken effect yet."
Total social financing, including loans, bank acceptance bills, corporate bonds and equity financing, was 1.04 trillion yuan last month, compared with June's 1.78 trillion yuan and May's 1.14 trillion yuan.
Net fundraising through corporate bonds reached 248.7 billion yuan in July, exceeding the first half's average by around 100 billion yuan.
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