China September new bank loans jump more than expected on stimulus, seasonal boost
FXI•Chinese banks issued 1.08 trillion yuan in new loans in September, above analysts’ 975 billion yuan forecast and sharply higher than August’s 60 billion yuan. Outstanding yuan loans grew a record-low 4.8% year over year, while M2 money supply growth slowed to an 18-month low of 7.2%.
1. Lending rebounds in September
Chinese banks extended 1.08 trillion yuan ($161.37 billion) in new loans in September, up sharply from 60 billion yuan in August and above analysts’ 975 billion yuan forecast. Lending was below the 1.29 trillion yuan issued a year earlier. Banks typically accelerate credit issuance toward quarter-end to meet internal targets.
2. Broader credit remains weak
Outstanding yuan loans rose 4.8% from a year earlier, a record low, while new loans totaled 11.52 trillion yuan in the first nine months, down from 14.75 trillion yuan in the same period last year. M2 money supply grew 7.2% year over year, an 18-month low, and M1 growth slowed to 3.2%. Outstanding total social financing rose 7.1%, down from 7.2% in August.
3. Stimulus and growth outlook
The lending pickup may indicate that Beijing’s latest stimulus push is gaining traction, but weak overall credit growth points to sluggish demand from households and businesses. Measures unveiled in late September included targeted rate cuts and mortgage subsidies. Fitch Ratings said the package should modestly improve credit transmission but is unlikely to materially lift broader credit demand or change the property sector’s weak trajectory. China is due to release third-quarter GDP data on October 19.
