BEIJING, Oct 17 (Reuters): China's new bank loans rebounded in September after dipping in the two previous months, as policymakers rolled out measures to ensure sufficient liquidity in the financial system amid worries a trade war with the United States could hurt the economy.
The People's Bank of China (PBOC) has cut reserve requirements for lenders four times this year, with the latest cut taking effect on October 15, injecting more liquidity to stimulate bank lending.
But the central bank still faces obstacles in funneling more credit to cash-strapped small businesses, which are vital for boosting economic growth and creating jobs.
Chinese banks extended 1.38 trillion yuan ($199.25 billion) in net new yuan loans in September, more than analysts had expected and up from the previous month.
Analysts polled by Reuters had predicted new yuan loans of 1.35 trillion yuan, up from 1.28 trillion yuan in August.
In Sept, household loans, mostly mortgages, rose to 754.4 billion yuan from 701.2 billion yuan in Aug.
Household loans accounted for 54.7 per cent of total new loans in September, versus 54.8 per cent in the preceding month, according to Reuters' calculations based on central bank data.
Corporate loans rose to 677.2 billion yuan in Sept from 612.7 billion yuan a month earlier.
Total new bank loans in the first nine months of the year jumped 17.7 per cent from a year earlier to 13.14 trillion yuan, and were on track to make a record year, eclipsing last year's 13.53 trillion yuan.
Broad M2 money supply grew 8.3 per cent in Sept from a year earlier, meeting analysts expectations and just slightly higher than the 8.2 per cent posted in Aug, central bank data showed on Wednesday.
Outstanding yuan loans grew 13.2 per cent from a year earlier, matching expectations and Aug's rise.
A recent run of key indicators showed a weakening in activity, with moderating industrial profits and record-low asset investment growth adding to the stress in the economy.
In a recent note, analysts at ANZ said they are expecting loan growth and total social financing to stay elevated in the coming months.
But rising defaults continue to keep lending appetite of banks at bay. Smaller companies, in particular, are still having a tough time securing loans and are grappling with rising borrowing and operating costs.
The weighted average lending rate for non-financial firms, which reflects corporate funding costs, inched up one basis point in the second quarter to 5.97 per cent, following a rise of 22 basis points in the first quarter and 47 basis points in 2017.
China's total social financing (TSF), a broad measure of credit and liquidity in the economy, rose to 2.21 trillion yuan ($319.08 billion) in Sept from 1.52 trillion yuan in Aug, data from the central bank showed.
TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.
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