China’s bank lending surged last month from December last year, the People’s Bank of China said, but analysts attributed the rise to seasonal factors.
Loans by Chinese banks reached about 1.3 trillion yuan (US$216 billion) last month, up 246.9 billion yuan from the same month a year ago, the Chinese central bank said in a statement on Saturday.
In December, banks granted just 482.5 billion yuan in new loans, previous figures showed.
Photo: Bloomberg
Last month’s lending figure beat the 1.1 trillion yuan median forecast by 11 economists polled by Dow Jones Newswires.
Social financing, a broader measure of credit in the economy than lending alone, rose 39.9 billion yuan year-on-year to 2.6 trillion yuan last month, the central bank said.
However, analysts said Chinese banks tend to lend more at the beginning of the year after being granted their annual lending quotas, and they expect the Chinese government to keep a grip on credit due to worries over financial risk.
“This is a common occurrence at the beginning of the year and we do not believe it reflects any shift in policy,” research firm Capital Economics said.
“On the contrary, with policymakers concerned about credit risks, we think that tight monetary conditions are probably here to stay and that this will continue to weigh on credit growth,” the firm said in a report.
China’s central bank pumped funds into the money market last month to ease a liquidity squeeze that rattled financial markets before the Lunar New Year holiday.
Chinese demand for funds traditionally increases before the week-long holiday, which began on Jan. 31 this year, as companies pay salaries, year-end bonuses and other obligations, while individuals withdraw cash for gifts and shopping.
The government worries a credit binge could cause bad debts to rise and expose China’s financial system to greater risk.
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