BEIJING |
BEIJING (Reuters) - China's banks probably stepped up lending in August as the government injected more money into the economy to prevent it from sinking into a seventh straight quarter of slowdown, a Reuters poll showed.
Chinese banks are expected to have lent 600 billion yuan in new loans last month, as the broader measure of M2 money supply grew 14 percent in August from July's 13.9 percent rise, median forecasts of 23 economists showed. Banks disappointed investors in July with surprisingly weak lending of 540.1 billion yuan.
The modest rebound, if true, could assuage investors spooked by July's run of unexpectedly bad data ranging from exports to factory output that pointed to a worsening economic slowdown.
Bank lending is a focal point in China's monetary policy. Money and credit figures are among the most closely-watched data as they reveal policy aims and the state of credit demand. Beijing conducts monetary policy by telling banks how much and when to lend.
Analysts said while China's loan growth should be supported by Beijing's fast-tracking of investment projects in recent months, a lending spike is not at hand unless the government aggressively loosens policy. Demand for loans is still lackluster as firms are running down inventories, they said.
"Stabilising investment growth and a warming property market will support the demand for credit, especially for mid- to long-term loans," said Lian Ping, an economist at the Bank of Communications based in Shanghai.
"But the absence of any aggressive loosening in monetary policy and the high gearing ratio of many companies will constrain growth in lending," he said.
The central bank has lowered the portion of cash that banks must hold as reserves by 150 basis points in three moves since November and cut interest rates twice in the space of four weeks between June and July.
But the central bank has since switched to using money market operations to inject short-term liquidity into the banking system, whilst holding off on explicit policy loosening for fear of rekindling consumer and property inflation.
Chinese state media reported that new loans from China's "big four" banks, which account for 30-40 percent of total lending, hit 220 billion yuan last month, up from 190 billion yuan in July.
All said, sluggish bank lending belies stronger financing activities outside the bank sector. Corporate bonds alone make up around 24 percent of July's total social financing, a broad measure of liquidity used by the central bank that includes equity issuance, bonds, trust loans, bank acceptance bills and others.
(M2, loan growth in percent change y/y; new loans in bln yuan)
FORECAST M2 New loans Loan Growth
CICC 13.5 650.0 15.9
China Construction Bank 13.6 600.0 15.9
ING Financial Markets 13.6 660.0 ~
Shenyin & Wanguo 13.7 546.8 15.8
BBVA 13.8 590.0 15.9
Shanghai Securities 13.8 500.0 15.9
ANZ 13.9 600.0 ~
Barclays Capital 13.9 560.0 ~
Everbright Securities 13.9 550.0 ~
CITIC Securities 14.0 600.0 ~
DBS 14.0 600.0 15.9
Goldman Sachs 14.0 670.0 ~
Guangdong Development Bank 14.0 630.0 ~
Hwabao Trust 14.0 580.0 15.9
Industrial Bank 14.0 600.0 15.9
Peking First Advisory 14.0 595.0 15.9
Bocom International 14.0 600.0 16.0
BofAML 14.0 680.0 16.1
CDB Securities 14.0 580.0 16.1
UBS 14.0 600.0 15.9
Zheshang Securities 14.0 600.0 15.9
BOC International Securities 14.1 600.0 16.2
Bank of Communications 14.2 630.0 ~
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Median 14.0 600.0 15.9
Highest 14.2 680.0 16.2
Lowest 13.5 500.0 15.8
> For more previews on China data, click [CN-MCE-PRE]
> China's economic indicator calender and polls ECONALLCN
> All Chinese economic data <CN/DATA>
> For more previews on China data, click CN-MCE-PRE
> China's economic indicator calender and polls
> All Chinese economic data
(Reporting by Aileen Wang and Koh Gui Qing; Editing by Simon Cameron-Moore)
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