China's February loans drop sharply below forecasts

Chinese banks issued CNY 1010 billion in new yuan loans in February 2025, a significant drop from the record high of CNY 5130 billion in January and below market expectations of CNY 1275 billion.

China's February loans drop sharply below forecasts

The slowdown in credit demand follows a strong start to the year, with the initial boost from banks' seasonal front-loading of loans fading. February’s loan total also lags behind the CNY 1450 billion recorded in the same month last year. Meanwhile, the money supply increased by 7% year-on-year, matching January's growth but slightly falling short of the anticipated 7.1%.

China's social financing drops sharply in February

Total social financing, which includes a broader range of credit and liquidity measures like IPOs, trust company loans, and bond sales, dropped to CNY 2290 billion in February, down from the record CNY 7060 billion seen in January. This suggests a cooling of overall economic-financial activity after the earlier surge.