BANKS in China extended 905.7 billion yuan (US$130.24 billion) in new yuan loans in February, down from January and falling short of analyst expectations.

Analysts polled previously had predicted new yuan loans would fall to 1.10 trillion yuan in February, down from a record high of 3.34 trillion yuan in the previous month and compared with 885.8 billion yuan a year earlier.

Broad M2 money supply in February grew 8.8 percent from a year earlier, central bank data showed yesterday, above estimates of 8.5 percent forecast in the previous poll. It rose 8.4 percent in January.

Outstanding yuan loans grew 12.1 percent from a year earlier compared with 12.1 percent growth in January. Analysts had expected 12.1 percent growth.

Economic activity in most of the country was curtailed by the shutdowns and quarantines, with some economists forecasting a quarterly contraction.

Policymakers are likely to maintain for now their targeted easing approach to encourage companies to restart work and prevent spillovers from the global markets selloff this week.

“The central bank will likely cut required reserve ratios in a targeted way in March to support credit growth and resumption of work,” Ding Shuang, chief China and North Asia economist at Standard Chartered in Hong Kong, wrote in a report before the data was released. “The priority is shifting gradually from disease control to work resumption.”

China’s outstanding total social financing (TSF) was 257.18 trillion yuan at the end of February, up 10.7 percent from a year earlier, the central bank said yesterday.

TSF includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In February, TSF plunged to 855.4 billion yuan from 5.07 trillion yuan in January. Analysts polled had expected February TSF of 1.6 trillion yuan.(SD-Agencies)