Chinese banks extended a record amount of new loans in January after authorities prompted them to lend more to businesses, although consumer lending remained low.
Financial institutions offered 4.9 trillion yuan ($719 billion) in new loans last month, more than the 4.2 trillion yuan forecast by economists, and compared with a record 3.98 trillion yuan a year earlier.
The People’s Bank of China said on Friday that a broad measure of credit – total financing – pushed up to 5.98 trillion yuan in January, well above economists’ estimates. The M2 measure of money supply grew by 12.6% from a year earlier, the fastest pace since April 2016.
Banks promote lending at the beginning of the year because they have abundant loan quotas to tap into and prefer to lend early to reap higher profits. Loan growth was even stronger this year after the central bank and banking regulator urged lenders to “front-load” credit expansion as part of the government’s efforts to turn around the economy.