BEIJING: China’s new bank loans fell more than expected in October to the lowest in a year, but the drop was likely seasonal and policymakers are expected to maintain solid support for the economy as the global pandemic rages on.
Authorities have stepped up support for smaller companies after a record coronavirus-induced slump early in the year. But while China’s economy is recovering quickly, surging infections in Europe and the United States are clouding the international outlook.
Lenders issued 689.8 billion yuan ($104.22 billion) in new yuan loans last month, data from the People’s Bank of China (PBOC) showed on Wednesday, down from 1.9 trillion yuan in September and well short of analysts’ expectations for 800 billion yuan.
Bank lending in China tends to slow late in the year as lenders have used up most of their annual quotas.
Still, banks doled out a total of 16.95 trillion yuan in new loans in the first 10 months, surpassing an annual record of 16.81 trillion yuan in 2019. PBOC Governor Yi Gang has said new loans for 2020 as a whole are likely to hit an all-time high of nearly 20 trillion yuan.
Annual growth of outstanding total social financing (TSF), a broad measure of credit and liquidity, quickened to 13.7% in October from 13.5% in the preceding month - a tailwind from policy stimulus that analysts believe could underpin the economic recovery in coming months.
Household loans, mostly mortgages, fell to 433.1 billion yuan from 960.7 billion yuan in September, while corporate loans plunged to 233.5 billion yuan from 945.8 billion yuan.
Improving economic data and recent comments from PBOC officials have prompted speculation that the central bank is ready to start dialling back emergency stimulus. But analysts say it will not rush to exit existing measures as long as uncertainties over the pandemic and global demand persist.
Broad M2 money supply in October grew 10.5% on-year, lagging estimates that it would hold steady at 10.9%.
Outstanding yuan loans grew 12.9% on-year, from a 13.0% rise in September.
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