China’s new bank loans hit record high in January on policy support

New bank loans in China jumped by more than expected to an all-time high in January, as the central bank moves to shore up the sputtering economy.

Policymakers have pledged to roll out more measures to support the weaker-than-expected post-COVID recovery in the world’s second-largest economy, amid a deep property crisis and prolonged stock market rout. Chinese lenders tend to front-load loans at the beginning of the year to get higher-quality customers and win market share.

Banks extended 4.92 trillion yuan ($683.7 billion) in new yuan loans in January, hitting a record high, up sharply from December and beating analysts’ expectations, data from the People’s Bank of China (PBOC) showed on Friday.

January lending more than quadrupled from December’s 1.17 trillion and exceeded the previous record of 4.9 trillion yuan in the same month a year earlier. Analysts polled by Reuters had predicted new yuan loans would rise to 4.50 trillion yuan in January.

Chinese banks doled out a record 22.75 trillion yuan in new loans in 2023, up 6.8% from 2022. But loan growth year-on-year fell to its lowest in more than 20 years in December as the weak economic outlook left consumers and companies in no mood to take on more debt.