China’s banks extended 1.7 trillion yuan of new loans in April, beating expectations

New bank lending in China fell less than expected in April from the previous month while growth of broad money supply quickened, as the central bank ramped up policy support for the coronavirus-ravaged economy.

Chinese banks extended 1.7 trillion yuan (US$240 billion) in new loans in April, down from 2.85 trillion yuan in March but exceeding expectations, according to data released by the People’s Bank of China (PBOC) on Monday.

Analysts polled by Reuters had predicted new yuan loans would fall to 1.4 trillion yuan in April, down from 2.85 trillion yuan in the previous month and compared with 1.02 trillion yuan a year earlier.

Broad M2 money supply in April grew 11.1 per cent from a year earlier, above the 10.2 per cent forecast in the Reuters poll. It rose 10.1 per cent in March.

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Outstanding yuan loans grew 13.1 per cent from a year earlier compared with 12.7 per cent growth in March. Analysts had expected 12.9 per cent growth.

Household loans, mostly mortgages, fell to 666.9 billion yuan (US$94.3 billion) in April from 989.1 billion yuan in March, while corporate loans fell to 956.3 billion yuan from 2.05 trillion yuan.

The PBOC has already rolled out a raft of easing steps since early February, including cuts in reserve requirements and lending rates and targeted lending support for virus-hit firms.