Chinese banks extended 1.84 trillion yuan ($274.91 billion) in net new yuan loans in June, beating analysts' expectations and hitting the a five-month high as policymakers stepped up support for the economy. Faced with a slowdown in domestic demand and potential fallout from a trade war with the United States, Chinese authorities have boosted policy support and softened their stance on deleveraging.
The rise in June loans also reflected increased formal loans amid a crackdown on shadow loans and other riskier lending practices, analysts said, as policymakers seek to bolster the economy while fending off fresh debt and property risks.
"Further cuts in banks' reserve requirement ratios (RRR) are likely to help keep liquidly ample. But we must ensure money flows into the real economy," said Wen Bin, economist at Minsheng Bank in Beijing.
"The higher-than-expected bank loans in June also reflect structural changes in the financial sector as risk controls force banks to move loans back into books."
Analysts polled by Reuters had predicted new June yuan loans of 1.6 trillion yuan, compared with May's 1.15 trillion yuan. China's banks extended a record 13.53 trillion yuan in new loans last year.
Broad M2 money supply grew 8.0 percent in June from a year earlier, central bank data showed on Friday, missing forecasts for 8.3 percent, as there was in May.
June's M2 growth was the lowest since at least January 1996, when Reuters data on the series began. The People's Bank of China has said a slowdown in M2 growth could be a "new normal" due to official deleveraging efforts.
Outstanding yuan loans in June grew 12.7 percent from a year earlier, faster than an expected 12.5 percent and almost the same as May's 12.6 percent.
Household loans, mostly mortgages, rose to 707.3 billion yuan from 614.3 billion yuan in May, according to the data, and accounted for 38.4 percent of total June new loans, versus 53.4 percent in May. Corporate loans rose to 981.9 billion yuan from 525.5 billion yuan a month earlier.