China Feb new loans fall below forecasts

As predicted there was a pull-back in new loans in China in February as Chinese banks tend to front-load loans at the beginning of the year.

Chinese banks extended 885.8 billion yuan ($A187.08 billion) in net new yuan loans in February, a sharp drop from January loans and less than expected, as policymakers continue to press lenders to help keep cash-starved companies afloat.

Analysts polled by Reuters had predicted new yuan loans of 975 billion yuan in February, down sharply from a record 3.23 trillion yuan in January.

A pull-back in February had been widely expected as Chinese banks tend to front-load loans at the beginning of the year to get higher-quality customers and win market share.

Broad M2 money supply grew 8.0 per cent in February from a year earlier, below forecasts, central bank data showed on Sunday. Analysts had expected a 8.4 per cent rise in M2 - unchanged from January.

Outstanding yuan loans grew 13.4 per cent from a year earlier, matching expectations and unchanged from January's rise.

Analysts say China needs to revive weak credit growth to help head off a sharper economic slowdown this year, but investors are worried about a further jump in corporate debt and the risk to banks as they relax their lending standards.


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Source: AAP



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