China new loans surge to record $458 billion, blow past forecasts

BEIJING: China’s banks extended a record 2.9 trillion yuan ($458.3 billion) in new yuan loans in January, blowing past expectations and nearly five times the previous month as policymakers aim to sustain solid economic growth while reining in debt risks.
While Chinese banks tend to front-load loans early in the year to get higher-quality customers and win market share, the lofty figure was even higher than the most bullish forecast by economists.
Net new loans surpassed the previous record of 2.51 trillion yuan in January 2016, which is likely to support growth not only in China but may underpin liquidity globally as major Western central banks begin to withdraw stimulus.
Analysts polled by Reuters had predicted new yuan loans of 2 trillion yuan, up sharply from December’s 584.4 billion yuan.
A more detailed breakdown of the loan data on Monday showed sharp pickups in demand for credit from both households and companies, auguring well for consumption and investment.
“Banks hope to lend early to get early returns… private investment and manufacturing investment are picking up due to firmer global demand (and) household loans could be boosted by property demand,” said Nie Wen, economist at Hwabao Trust in Shanghai. — Reuters