China's bank lending declined sharply in December from November, the central bank said today, despite moves to keep the world's second largest economy from slowing further with looser monetary policy.
New loans extended by banks slid to 597.8 billion yuan (USD 91.1 billion) in December, against 708.9 billion yuan in November, the People's Bank of China said.
"The lower-than-expected new loans suggest that credit demand remained weak," ANZ Banking Group said in a research note, adding that commercial banks were reluctant to lend given increasing risk.
China has cut interest rates six times since late 2014 and has also lowered the proportion of reserves that banks must set aside, in an effort to boost lending and revitalise the flagging economy.
The country's yuan-denominated lending for all of 2015 reached 11.72 trillion yuan, figures showed, which the official Xinhua news agency described as a new high.
China's total social financing -- the broadest measure of credit in the economy -- was 1.82 trillion yuan in December, the central bank said, higher than 1.02 trillion yuan in November and above the median forecast of 1.15 trillion yuan according to a Bloomberg News survey.
"Lending to the real economy remained strong at the end of last year, which should help support economic activity in the coming months," Capital Economics said in a research note.
China's economic growth hit a 24-year low in 2014 and the country logged its worst economic performance since the global financial crisis in the third quarter of 2015, with gross domestic product (GDP) expanding 6.9 per cent.
The government will announce fourth quarter and 2015 GDP figures on Tuesday.
REOPENS FGN 9
Thanks to these moves, the economy has seen some improvement since the beginning of this year, with exports and industrial profits returning to growth, manufacturing activity picking up and power use accelerating, state-run Xinhua news agency reported.
Also investment in China's property sector rose 6.2 per cent year-on-year in the first quarter of 2016.
The expansion continued to pick up following the 3 per cent increase for the January-February period and the 1 per cent growth for the whole of 2015.
The new yuan-denominated lending in March amounted to 1.37 trillion yuan (USD 210 billion) that is 188.3 billion yuan more than a year earlier pointing to increased investments.
In the first quarter, China's new yuan loans rose to 4.61 trillion yuan, up 930.1 billion yuan from a year earlier, the People's Bank of China (PBOC) said in a statement.
The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 13.4 per cent year-on-year to 144.62 trillion yuan at the end of March, the bank said.
