Chinese banks released 5-times more new loans in national currency in January 2018, compared to the previous month. The total value of the new loans in the country amounted to 2.9 trillion CNY (458 billion USD) in the beginning of the year, compared to 584.4 billion CNY in December, according to the latest data of the People’s Bank of China.
The market participants and analysts expected much less credits of just over 2 trillion CNY.
The growth rates of yuan lending rose sharply last month, against the backdrop of fierce limitations on the gray banking sector. Also there is a trend in growing of credits before the Chinese New Year, which is celebrated on February 16th.
According to the economists, the record-breaking volumes of new yuan lending were not a surprise because they are related to seasonal factors: banks are always more likely to lend at the beginning of the year, and some loans were probably postponed at the end of last year.
Overall, the credit portfolio of Chinese banks grew by 13.2% at the end of January 2018, compared with the same period last year. The analysts’ average forecast predicted a decline to 12.5% from December’s 12.7%. Despite the struggle of the Chinese authorities with the over-indebtedness of the economy, in 2017, the Chinese banks have granted record new loans worth 13.53 trillion yuan, which represented an increase of 7% year-on-year.
The high indebtedness of the Chinese households and companies worries many investors and organizations, who warn that country need to shrink its public debt. The local authorities took several preventive measures to stop the growth of debts, but still much need to be done to ensure high security of the financial system.