Chinese banks lent more in 2015

BEIJING - China's new yuan-denominated lending in 2015 hit 11.72 trillion yuan ($1.79 trillion), up 1.81 trillion yuan from 2014, new data showed on Friday.

In December, new lending reached 597.8 billion yuan, down 345.3 billion yuan from the same month of 2014, said the People's Bank of China (PBOC), the central bank.

"New lending in December was slightly lower than expected due to remarkable lending cuts by non-bank financial institutions," said HSBC chief China economist Qu Hongbin, referring to businesses including insurers, cashier's check issuers, pawn shops and microloan organizations that lack full banking licenses.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 13.3 percent year on year to 139.23 trillion yuan in 2015, according to the PBOC. The growth rate in December was 0.4 percentage points lower than that in November, but 1.1 percentage points higher than in December 2014.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, rose 15.2 percent year on year to 40.1 trillion yuan in 2015. The monthly growth rate in December was 0.5 percentage points lower than in November but 12 percentage points higher than in December 2014.

Yuan-denominated deposits with Chinese banks increased by 14.97 trillion yuan in 2015, 1.94 trillion yuan more than the previous year.

By the end of 2015, China's foreign exchange reserves stood at $3.33 trillion.

Total social financing (TSF) in 2015 stood at 15.41 trillion yuan, 467.5 billion yuan less than in 2014, according to the central bank's data. TSF is a Chinese liquidity measurement tool that counts fundraising by non-state entities, including individuals and non-financial corporates.

In December, social financing totaled 1.82 trillion yuan, 792.7 billion yuan more than in November and 247.7 billion yuan more than in December 2014.

Qu attributed the increase to a large rise in entrusted loans and bond financing.

"Despite the lending expansion, there is still room for credit growth as more liquidity is needed to underpin growth," the economist said.

"Stronger credit growth at the end of 2015 adds to the evidence that China's stimulus has gained traction in stabilizing growth," Bloomberg said in a report to clients.