China Banks Boosted Lending in September; M2 Growth Rebounds

Chinese banks ramped up lending in September, while growth in broad money supply and total financing both accelerated as the government sought to keep ample liquidity in the economy.

New loans issued by Chinese lenders stood at 1.27 trillion yuan ($192.66 billion) in September, up from 1.09 trillion yuan in August, the People’s Bank of China said Saturday.

Chinese banks tend to lend at full capacity at the end of each quarter, economists say. Still, September’s new-credit figure was higher than economists’ median forecast of 1.18 trillion yuan.

Medium- to long-term loans to nonfinancial companies, a gauge of credit demand from corporations, came in at 502.9 billion yuan ($76.29 billion) in September, according to Wall Street Journal calculations based on central bank data. That compared with 363.9 billion yuan in August.

Medium- to long-term loans to households, which are mostly made up of mortgage loans, rose to 478.6 billion yuan in September from August’s 447 billion yuan, calculations showed.

Total social financing–a broad measurement of credit in the economy that includes bank loans, corporate bonds and trust loans–reached 1.82 trillion yuan in September, the central bank said, the highest level since March and up from 1.48 trillion yuan in August.

Growth in M2–a broad measure of money supply including cash, and checking and savings deposits–rebounded to 9.2% in September from a record low 8.9% in August, the data showed. September’s M2 growth beat economists’ forecast of 8.9%.
Source: Dow Jones