China Aug bank lending picks up, in line with forecast

Updated: 2014-09-12 14:14

(Agencies)

  Comments() Print Mail Large Medium  Small 分享按钮 0

China Aug bank lending picks up, in line with forecast

A clerk counts yuan bills at a bank in Huaibei, East China's Anhui province. [Photo/IC]

BEIJING - Chinese banks made 702.5 billion yuan ($114.6 billion) of new loans in August, data showed on Friday, picking up from an abrupt drop in the previous month as the government keeps up modest policy support for the economy.

The number was in line with market expectations.

Economists polled by Reuters had expected new loans totaling 700 billion yuan in August, up from 385.2 billion yuan in July but trailing June's 1.08 trillion yuan.

Broad M2 money supply rose 12.8 percent in August from a year earlier, the People's Bank of China said in a statement on its website, below 13.4 percent expected by economists and the slowest pace in five months.

Outstanding yuan loans grew 13.3 percent from a year ago, slightly above a predicted 13.2 percent rise.

China's total social financing aggregate, a broad measure of liquidity in the economy, was 957.4 billion yuan in August, versus 273.1 billion yuan in July, which was the lowest in nearly six years.

The unexpectedly weak July credit and financing figures had added to fears that a sustained economic recovery may be at risk in the second half of the year despite government efforts to shore up growth. Chinese banks recently reported an increase in bad loans for the first half of the year, prompting speculation they would clamp down on new credit, especially to more vulnerable sectors of the economy.

A raft of stimulus steps since April, including faster spending on infrastructure work and cuts in reserve requirements for small banks, lifted annual economic growth to 7.5 percent in the second quarter from an 18-month low of 7.4 percent for January-March.

But the July credit slump, alongside tepid growth in investment and factory output, suggested the world's second-largest economy may need fresh support to help offset the increasing drag from a cooling property sector.

Premier Li Keqiang said last month that the government will maintain its "targeted" policy stance to keep economic growth on track, focusing on investment projects in key areas.

Li said on Monday that China cannot rely on loose credit to lift its economy, and reassured listeners at a business forum that the economy could grow by around 7.5 percent this year as targeted by the government.

Still, many analysts believe the door for cutting interest rates or reserve requirements for all banks remains open if conditions deteriorate further.