China’s RMB loans declined sharply to RMB513.6 billion in October, from RMB1,050 billion in September, below market expectations of RMB800 billion.
The country’s total social financing aggregate also fell to RMB476.7 billion in October, much lower than RMB1.3 trillion recorded in September.
Off-balance sheet financing, including banker’s acceptance draft, trust loans and entrusted loans, declined by RMB250.5 billion in October, reflecting the ongoing deleveraging process.
China’s M2 rose by 13.5% in October, from 13.1% in September, above the official target of 12% for 2015.
"The decline in new loans was partly due to the week-long National Day holidays in the beginning of October. However, even compared with October last year, new yuan loans declined RMB34.7 billion, reflecting lack of demand and commercial banks’ caution to extend credit due to rising non-performing loans," says a report by ANZ.
But the bank cautions fourth quarter GDP numbers might not be as strong as previously expected.