China added RMB644.5 billion in new RMB loans in February, down from RMB1.32 trillion in January, data from the People’s Bank of China shows.
February’s new RMB loan number is below market expectations of around RMB740 billion.
Total social financing, a wider measure of overall credit growth in the country, came in at RMB938.7 billion in February, less than half of January’s RMB2.58 trillion.
China’s M2, the broadest measure of money supply, was up 13.3% year-on-year at the end of February, compared to January’s 13.2% growth.
"The sharp month-on-month decline was driven by the fact that a significant portion of February’s credit growth was front-end loaded into January due to the timing of Chinese New Year, and total social financing growth has slowed since the near-default of (a) trust product in the final week of January," writes senior equity analyst at Sanford C. Bernstein, Michael Werner, in a report.
"We are forecasting RMB9.0-9.5 trillion of new loan growth in 2014, up slightly from the RMB 8.9 trillion reported for full-year 2013," he adds. "(It) would be equivalent to 13% year-on-year growth this year vs. 14% growth in 2013."