Chinese Bank Loans Hit Unexpected Low in October

New loans by Chinese banks in October dropped sharply from September's figures, missing market expectations due to ongoing credit demand weakness. Reuters reports loans amounted to 220 billion yuan, a steep decline from 1.29 trillion yuan in September. Analysts had anticipated loans to hit 500 billion yuan.

In a surprising turn, new loans issued by Chinese banks plummeted in October, revealing a significant decrease compared to the previous month and falling short of market projections. Amid persistent credit demand weakness, banks issued 220 billion yuan in loans, a substantial drop from September's 1.29 trillion yuan, according to calculations by Reuters based on data from the People's Bank of China.

Market analysts, previously polled by Reuters, had expected new loans in October to reach 500 billion yuan, mirroring levels from the same period last year. This expectation was based on seasonal trends observed in September. However, the absence of a monthly breakdown from the central bank compelled Reuters to derive the October figure from a comparison of January-October and January-September data.

Economic uncertainty, a protracted property sector downturn, and ongoing trade tensions between Beijing and Washington have left Chinese businesses and households hesitant to incur additional debt. As a result, the anticipated recovery in loan issuance has failed to materialize.

(With inputs from agencies.)