MNI 5 Things: China Feb Loan Data Show Slowing Loan Growth

     BEIJING (MNI) - The following lists key points from data on China's

February money supply and credit growth, released by the People's Bank of China

on Friday:

     - New yuan-denominated loans increased by CNY839.3 billion in February from

January, below the median of a MNI survey of CNY900 billion. It is also a sharp

drop from CNY1.17 trillion m/m increase recorded in February last year. MNI

believes that the weaker-than-expected growth was at least partly affected by

the Chinese New Year last month and will analyze the data further.

- Total social financing (TSF) grew by CNY1.17 trillion in February from

January, higher than the median of the MNI survey, which projected CNY1.0

trillion, and also slightly higher than the CNY1.15 trillion m/m gain in

February 2017. Loan growth was the main component pushing TSF higher, while

shadow banking, or off-balance-sheet, activities slowed limited by the financial

deleveraging campaign. 

     - M2 grew 8.8% y/y in February, lower than the 11.1% growth in same month

last year. However, it accelerated from the 8.6% y/y growth in January and was

faster than the 8.7% median of MNI survey.  

     - Medium- and long-term loans to households and corporations increased by

CNY980.5 billion in February from January. That is substantially more than the

CNY93.9 billion gain in short-term loans. Faster long-term loan growth shows

strong funding demands.

     - Capital raising through bond and stock issuances rose by CNY110.1 billion

from January. The amount of increase was CNY165.6 billion higher than the m/m

gain recorded in February last year. Due to China's tightening financial

regulation, companies previously sough off-balance-sheet financing now have to

resort to more transparent on-record channels, mostly through bank loans but

also through selling bonds and shares.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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