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Banks in China lend surprisingly more in May

June 15,2017

   
   

BANKS in China lent surprisingly more in May while growth in money supply slowed to a record low amid deleveraging taking place in the financial sector as regulations were tightened.

New yuan loans totaled 1.1 trillion yuan (US$161.91 billion) in May, 126.4 billion yuan more than the same month last year, the People’s Bank of China said yesterday.

The new loans compared with market expectations of 900 billion yuan in a Reuters poll.

M2, the broader measure of money supply, rose 9.6 percent year on year, the first single-digit gain on record and slower than market expectations for 10.4 percent.

M2 growth slowed amid tighter regulation to prevent risks, the PBOC said in a statement.

The Australia and New Zealand Banking Group yesterday said the strong loan growth in May signalled corporate demand and fixed asset investment flows.But the bank said financing may start to slow in the coming months, as Chinese banks face further constraints in their lending against a backdrop of financial deleveraging.