Chinese Banks’ Loan Activity in July 2023

BEIJING (Reuters) – Chinese banks extended 260 billion yuan ($36.26 billion) in new yuan loans in July, a decrease from the previous month and below analysts’ forecasts.

This highlights weak demand as a prolonged property downturn and job insecurity undermine business and consumer confidence. Analysts had projected new yuan loans would be around 450 billion yuan for July, down from 2.13 trillion yuan in June and higher than 345.9 billion yuan from a year earlier.

The People’s Bank of China (PBOC) does not provide monthly breakdowns, but Reuters calculated July figures based on the bank’s data released for January-July, in comparison to January-June data. The PBOC reported new yuan loans totaled 13.53 trillion yuan for the first seven months of the year.

In addition, growth in broad M2 money supply accelerated to 6.3% year-on-year in July, above 6.1% estimated in the Reuters poll and close to 6.2% in June. However, growth in outstanding yuan loans slowed to 8.7%, compared to 8.8% in June, deviating from the analysts’ expectation of 8.8% growth.

($1 = 7.1705 Chinese yuan renminbi)