China records sharp fall in new yuan bank lending
February’s total a correction to rapid loan growth of previous month, economists say
New yuan bank loans fell sharply on the mainland last month, amounting to less than one-third of January’s total, according to data released by the People’s Bank of China (PBOC) late on Friday.
Aggregate social financing also shrank, the central bank said.
After an all-time new bank credit high of 2.51 trillion yuan (US$386 billion or HK$2.99 trillion) in January, banks extended just 726.6 billion yuan in new yuan loans last month, while total social financing fell to 780.2 billion yuan – a sharp drop even when factoring in the Lunar New Year.
READ MORE: Chinese banks hand out record HK$3 trillion of loans in bid to bolster mainland’s slowing economy
The reading, released hours before a key central bank press conference on Saturday by PBOC governor Zhou Xiaochuan, may lead to a big shift in expectations for monetary policy easing.
February’s new loan figure was well below expectations and came after the PBOC last month instructed mid-sized and small banks to slow the pace of lending, especially to “zombie” projects.
Economists said February’s fall was a correction to January’s overly rapid growth in lending.
