China's central bank policy seen steady despite drop in loans
Yuan-denominated loans drop to 13-month low in October as corporate bond financing and foreign-currency loans record significant growth
Chinese banks extended fewer loans last month but analysts said the country's central bank is unlikely to further ease monetary policy further as new lending is expected to stabilise on the back of an economic recovery.
New yuan-denominated lending fell 81.6 billion yuan (HK$100.5 billion), or 13.9 per cent, to 505.2 billion yuan from a year ago, the People's Bank of China (PBOC) said on its website yesterday.
The new lending, which was the lowest in 13 months, missed the 590 billion yuan median estimate of 28 analysts surveyed by Bloomberg.
The loan figure does not reflect the actual credit environment as it did not include off-balance-sheet loans such as trust loans and government acceptance bills, said Wang Tao, an economist with UBS Securities. Foreign-currency loans and corporate bond financing, which were also excluded from new lending, saw significant growth in the month, she added.
Corporate bond financing increased by 82.5 per cent to 299.2 billion yuan in October from a year earlier, the bank's website shows. Trust loans rose by 135.5 billion yuan to 144.5 billion yuan in October from a year ago, and new foreign-currency lending amounted to the equivalent of 129 billion yuan in the month, an increase of 87.5 billion yuan.
Aggregate financing, which includes sources of funding such as trust loans and bond and stock issuance, was 1.29 trillion yuan in October, up 63 per cent, or 503.8 billion yuan, from a year ago, PBOC said.
The bank said the M2 measure of money supply - the amount of money in circulation - rose 14.1 per cent to 93.6 trillion yuan at the end of last month from a year ago, and outstanding yuan loans rose 15.9 per cent to 62 trillion yuan.