(MENAFN - AFP) China's bank lending halved in February from January, the government said Monday, amid worries over a near-default on a financial product structured by the risky trust sector.
Domestic banks extended 644.5 billion yuan ($105.0 billion) in new loans last month, up 24.5 billion yuan from the same month last year, the central bank said in a statement.The February lending figure fell short of a median forecast of 740 billion yuan, according to a poll of economists by Dow Jones Newswires.New loans had reached a huge 1.3 trillion yuan in January, previous People's Bank of China figures showed, with analysts attributing the spike to banks front-loading lending at the beginning of the year.The central bank also said total social financing, a broader measure of credit, was 938.7 billion yuan in February, down 131.8 billion yuan from the same month last year."Much of the slowdown in broad credit was in trust loans, perhaps signalling that investors are becoming more wary following the highly-publicised near default in the sector at the end of January," Capital Economics said in a report Monday.Early this year, a $500 million investment product structured by China Credit Trust and sold by the nation's largest bank ICBC avoided default after an unknown party made good on principal payments to hundreds of investors, though they did not receive pledged interest.Authorities have pledged to strengthen regulation of risky trust products as part of their efforts to crack down on "shadow banking", a vast network of lending outside formal channels.But analysts said the credit slowdown did not signal a policy change. The government has said it would maintain a "prudent" monetary policy for this year."February new yuan loan figures, though lower than market expectations, still rose from the same month last year, so there's no big surprise," Nomura International economist Wendy Chen told AFP."There's little change on lending policies," she said.
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