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.

The report said the central bank will keep growth of M2 and social financing in line with and slightly higher than nominal gross domestic product growth.

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

The net new lending figures are highly seasonal, so it makes sense to focus on the year-on-year change in the outstanding amounts to gauge the underlying trend, analysts said.

“Credit growth continued to accelerate last month as a pickup in bank loans and direct financing offset a deepening contraction in shadow credit,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

“After the persistent slowdown in credit growth in recent years, the latest pickup is a reminder that the PBOC is still capable of engineering faster lending when it wants to. The PBOC’s latest monetary policy report, published over the weekend, suggests that further easing measures are in the pipeline and that credit growth will probably continue to accelerate in the coming months

“This should provide a tailwind to the economic recovery but is likely to worsen structural problems. Despite policymakers efforts, the [small and medium-sized enterprises] that have been hit the hardest by the crisis remain poorly served by the traditional banking system.

“And although these firms can turn to shadow banks, the deepening contraction in shadow credit last month suggests that regulators have yet to ease restrictions on these type of lenders. As a result, much of the acceleration in credit growth is being driven by local governments and state-owned firms, who tend to make use of funds less efficiently than their private counterparts.”

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.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 12 per cent in April from a year earlier and from 11.5 per cent in March.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In April, TSF fell to 3.09 trillion yuan from 5.15 trillion yuan in March. Analysts polled by Reuters had expected April TSF of 2.65 trillion yuan.