China banks extend record 12.65tr yuan in new loans in 2016
Chinese banks extended a record 12.56 trillion yuan ($1.82 trillion) of loans in 2016 as the government encouraged more credit-fueled stimulus to meet its economic growth target, despite worries about the risks from an explosive jump in debt.
China's top leaders pledged after a key meeting last month to stem the growth of asset bubbles in 2017 and place greater importance on the prevention of financial risk, while keeping a "prudent and neutral" monetary policy.
But in December alone, Chinese banks extended 1.04 trillion yuan in net new yuan loans, far more than expected and lifting the yearly total well above the previous all-time high set in 2015.
Analysts polled by Reuters had expected December new lending would fall to 700 billion yuan from November's 794.6 billion yuan.
New bank loans last year surpassed the levels of China's massive credit-led stimulus during the global financial crisis in 2009, according to Reuters calculations based on central bank data. The total was some 8 percent above the previous all-time high of 11.72 trillion yuan in 2015.
Lending continued to be driven heavily by robust mortgage growth despite a slew of measures rolled out by local governments late in 2016 to cool sizzling housing prices and contain property bubbles.
Household loans accounted for 50 percent of total new yuan loans in 2016, while corporate loans accounted for 48 percent.
Medium-to-long-term loans accounted for 78 percent of total new loans, while short-term loans accounted for 11 percent.
Broad M2 money supply (M2) grew 11.3 percent from a year earlier, central bank data showed on Thursday, missing forecasts.
Outstanding yuan loans ticked up by 13.5 percent by month-end on an annual basis. Outstanding loans had been expected to rise 13.1 percent while money supply was seen up 11.5 percent.
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