Bank loans

China April new bank loans drop to 645.4 bln yuan, below forecast

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BEIJING — New bank lending in China fell in April from the previous month as the COVID-19 pandemic rattled the economy and weakened demand for credit, even as the central bank pledged to bolster policy support to avoid a more marked slowdown.

Chinese banks extended 645.4 billion yuan ($95.14 billion) in new yuan-denominated loans in April, down sharply from March and below analysts’ expectations, according to data released by the Bank on Friday. popular in China.

Analysts polled by Reuters had predicted new yuan lending would fall to 1.52 trillion yuan in April, down from 3.13 trillion yuan the previous month and 1.47 trillion yuan a year earlier.

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Full or partial shutdowns to stop the spread of COVID-19 outbreaks in dozens of Chinese cities, including a city-wide shutdown in Shanghai’s commercial hub, have hit the economy hard.

To cushion a sharp slowdown in economic growth, the central bank reduced the amount of cash banks must hold as reserves from April 25, and more modest easing measures are expected.

The central bank said on Monday it would step up support for the slowing economy, while closely monitoring domestic inflation and monitoring policy adjustments in developed economies.

M2 broad money supply rose 10.5% from a year earlier, central bank data showed, above Reuters poll estimates of 9.9%. M2 rose 9.7% in March compared to a year ago.

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Outstanding yuan loans rose 10.9 percent in April from a year earlier, compared with 11.4 percent growth in March. Analysts were expecting growth of 11.4%.

Growth in the total stock of social finance (TSF), a broad measure of credit and liquidity in the economy, slowed to 10.2% in April from a year earlier and 10.6% in March.

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

In April, the TSF fell to 910.2 billion yuan from 4.650 billion yuan in March. Analysts polled by Reuters had expected an April TSF of 2.15 trillion yuan. ($1 = 6.7835 Chinese yuan renminbi) (Reporting by Judy Hua and Kevin Yao; Editing by Toby Chopra and Simon Cameron-Moore)

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