Loans drop to ¥260 billion, below expected ¥400 billion

  • Chinese banks’ loan issuance dropped sharply in July
  • Loans fell from ¥2.13 trillion in June to ¥260 billion
  • Economists expected ¥400 billion but received ¥260 billion
  • Bank loans excluding those handed out to financial institutions dropped by ¥77 billion
  • New household loans turned negative for the third time this year
  • Corporate long-term loans more than halved compared with a year ago
  • Bill financing jumped in July
  • Total social financing stood at ¥770 billion last month
  • M2, the broadest measure of money supply, rose at a mild pace of 6.3%
  • Economists anticipate further monetary easing and stronger fiscal support to boost credit growth

Chinese banks’ loan issuance plunged in July from the previous month due to cautious attitudes towards debt amid an uncertain economic outlook. Loans excluding those handed out to financial institutions dropped by ¥77 billion for the first time in 19 years, and new household loans turned negative for the third time this year. Corporate long-term loans more than halved compared with a year ago. Bill financing jumped in July, but economists say it indicates weak credit demand. Total social financing stood at ¥770 billion last month. M2, the broadest measure of money supply, rose at a mild pace of 6.3%. Expectations for further monetary easing and stronger fiscal support to boost credit growth persist.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the decline in Chinese bank loans in July compared to June, citing data from the People’s Bank of China and expert opinions. It also discusses potential reasons for this decline, such as cautious attitudes towards debt due to an uncertain economic outlook, ongoing economic restructuring, and the limited effects of rate cuts. The article presents a balanced view of the situation without any clear bias or personal perspective.
Noise Level: 7
Noise Justification: The article provides relevant information about a decline in Chinese bank loans and its potential impact on the economy but lacks detailed analysis or actionable insights. It also contains some repetitive information and could benefit from more context and evidence to support its claims.
Public Companies: Barclays (BARC), Goldman Sachs (GS)
Key People:

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Financial Relevance: Yes
Financial Markets Impacted: Chinese banks and financial markets
Financial Rating Justification: The article discusses a sharp drop in loans issued by Chinese banks, impacting the real economy and financial markets. It also mentions expectations of further monetary easing and increased government bond issuance to boost credit growth, which can affect the overall economic situation in China.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.
Deal Size: The deal size mentioned in this article is $36.24 billion.
Move Size: No market move size mentioned.
Sector: All
Direction: Down
Magnitude: Large
Affected Instruments: Stocks, Bonds

Reported publicly: www.wsj.com