China bank lending surges to record in January

Posted by BankInfo on Wed, Feb 17 2016 10:22 am
Afp, Shanghai

China's bank lending surged to a record 2.51 trillion yuan ($385 billion) in January, official figures showed Tuesday, as credit gushed to help boost the flagging economy.

New loans extended by banks beat market expectations of 1.9 trillion yuan, according to a median forecast compiled by Bloomberg News, and far exceeded the 597.8 billion yuan in December.

But analysts cautioned that seasonal factors might have played a role, as lending typically jumps at the beginning of the year when the state-dominated banking sector receives new quotas for loans.

"China's new yuan loans surged to a record high," ANZ Banking Group said in a research note. "New yuan loans exhibit a strong seasonality and usually peak in January."

Companies might also be switching into yuan currency debt given declining interest rates, it added.

China's economy grew 6.9 percent last year, the slowest rate in a quarter century, which has prompted the central bank to cut interest rates six times since late 2014 and also reduce the amount of funds banks must set aside as reserves.

News:The Daily Star/17-Feb-2016
Posted in Banking, News