Image: Reuters Berita 24 English - China's new bank lending increased significantly more than anticipated in May, and broader credit gro...
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| Image: Reuters |
Berita 24 English - China's new bank lending increased significantly more than anticipated in May, and broader credit growth also accelerated, as regulators attempted to reverse a severe COVID-induced economic downturn.
According to figures issued by the People's Bank of China on Friday, Chinese banks extended 1.89 trillion yuan ($282.62 billion) in new yuan loans in May, nearly surpassing April's total and easily exceeding expectations.
Reuters polled analysts who projected that fresh yuan loans will increase to 1.3 trillion yuan in May, up from 645.4 billion yuan in April and compared to 1.5 trillion yuan a year earlier.
In May, household loans, including mortgages, increased to 288.8 billion yuan from 217 billion yuan in April, while corporate loans jumped to 1.53 trillion yuan from 578.4 billion yuan in April.
As Shanghai and other cities lessen COVID-19 lockdowns due to a decline in new infections, Chinese leaders have increased support for the weakening economy.
To boost firms, the cabinet announced a package of policy measures last month, including as expanding tax credit rebates and delaying social security payments and loan repayments.
Last month, local media also reported that financial regulators had instructed commercial banks to expedite lending.
In May, the central bank slashed its benchmark reference rate for mortgages by an unexpectedly large margin, its second reduction this year, in an effort to stimulate economic development by reviving a declining housing market.
According to analysts, however, both banks and prospective borrowers remain apprehensive in the event of additional virus disruptions.
Shanghai, the commercial hub of China, will lock down millions of people this weekend for widespread COVID-19 testing, just 10 days after releasing a gruelling two-month lockdown, upsetting locals and raising fears about the business impact.
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Premier Li Keqiang has pledged to achieve positive economic growth in the second quarter, despite the fact that many private sector economists forecast a contraction.
A cabinet meeting was described as indicating that China will expand the credit quota for policy banks by 800 billion yuan ($120 billion) so that they can fund infrastructure projects.
The broad M2 money supply increased by 11.1% from the previous year, according to data from the central bank, exceeding the 10.4% increase predicted by a Reuters poll. M2 increased by 10.5% in April compared to the same month a year ago.
In May, outstanding yuan loans increased 11.0 percent from the previous year, compared to 10.9 percent in April. Analysts had predicted a growth rate of 10.7 percent.
In May, the expansion of outstanding total social financing (TSF), a broad indicator of credit and liquidity in the economy, accelerated to 10.5% from 10.2% in April.
TSF consists of non-balance-sheet types of financing that exist outside of the typical bank lending system, such as initial public offerings, loans from trust firms, and bond sales.
TSF increased to 2.79 trillion yuan in May from 900.2 billion yuan in April. Reuters polled analysts who anticipated a May TSF of 2.02 trillion yuan.
