China’s banks extend record loans as firms borrow more

Bloomberg

Chinese banks extended a record amount of new loans
in January after authorities prodded them to lend more to businesses, though consumer borrowing remained subdued.
Financial institutions offered 4.9 trillion yuan ($719 billion) of new loans last month, higher than the 4.2 trillion yuan estimated by economists, and compared with a record 3.98 trillion yuan a year ago.
That pushed the broad measure of credit — aggregate financing — to 5.98 trillion yuan in January, the People’s Bank of China said, above economists’ estimates. The M2 measure of money supply rose 12.6% from a year earlier, the fastest pace since April 2016.
Banks tend to boost lending at the start of the year since they have abundant loan quotas to tap and they prefer to lend early to reap more profit. Loan growth was even stronger this year after the central bank and banking regulator urged lenders to “front-load” credit extension as part of the government’s efforts to turn the economy around.
The data showed a surge in loans to companies and a rebound in corporate bond issuance. While consumers took out more loans than in December, their demand for financing plunged from a year earlier.