UPDATE 1-China March new bank loans rise to 2.73 trln yuan, beat forecast

Australian dollars in Sydney, Friday, Jan. 15, 2016. (AAP Image/Joel Carrett) NO ARCHIVING

* March new loans 2.73 trln yuan vs f’cast 2.45 trln yuan

* Q1 new loans at record high – Reuters calculations

* March M2 money supply +9.4% y/y, vs f’cast of +9.6%

* March TSF 3.34 trln yuan, vs f’cast 3.70 trln yuan

BEIJING, April 12 (Reuters) – New bank lending in China rose more expected in March from the previous month as the central bank walks a tightrope between supporting the rapidly recovering economy and containing debt risks.

Chinese banks extended 2.73 trillion yuan ($416.62 billion)in new yuan loans in March, up from 1.36 trillion yuan in February and exceeding analyst 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 rise to 2.45 trillion yuan in March. The new loans were lower than 2.85 trillion yuan a year earlier.

That pushed bank lending in the first quarter to a record high of 7.67 trillion yuan, according to Reuters’ calculations based on central bank data. It beat the previous peak of 7.1 trillion yuan in the first quarter of 2020, when policymakers began rolling out unprecedented measures to deal with the shock from the coronavirus crisis.

China’s credit trends are being closely watched by investors who are increasingly worried about policy tightening as Beijing looks to exit from emergency measures now that the world’s second-largest economy is quickly regaining momentum. The country’s blue-chip share index fell over 5% in March, its worst monthly performance in a year.

The central bank has pledged to stabilise the country’s overall debt level which jumped last year due to stimulus measures, but has said it will avoid a sudden policy shift and will continue to support ailing small firms.

Last year, the central bank rolled out a raft of measures including cuts in interest rates and reserve ratios to support the economy. But it has kept the benchmark lending rate, the loan prime rate, unchanged since May.

Broad M2 money supply in March grew 9.4% from a year earlier, below estimates of 9.6% forecast in the Reuters poll. It rose 10.1% in February.

Outstanding yuan loan grew 12.6% from a year earlier compared with 12.9% growth in February. Analysts had expected 12.6% growth.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 12.3% in March from a year earlier and from 13.3% in February.

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 March, TSF rose to 3.34 trillion yuan from 1.71 trillion yuan in February. Analysts polled by Reuters had expected March TSF of 3.70 trillion yuan.

($1 = 6.5528 Chinese yuan renminbi)

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