PBOC's total social financing rebounded to RMB 1.23t in November

Thanks to the pickup in non-bank lending.

According to Barclays, the People’s Bank of China (PBOC) reported on 11 December 2013 that November new RMB loans amounted to RMB 625bn (higher than Bloomberg consensus of RMB 580bn).

Total social financing (TSF) rebounded to RMB 1.23tn in Nov from RMB 856bn in Oct, mainly due to the pickup in non-bank lending (+RMB 593bn in Nov vs. +RMB 345bn in Oct) and higher RMB loans (+RMB 625bn in Nov vs. +RMB 506bn in Oct).

Here's more:

New loan growth was mainly supported by the swing in discounted bills (+RMB 19bn in Nov vs. -RMB 71bn in Oct), higher new short-term (ST) corporate loans (+RMB 241bn in Oct, 39% of total new loans) and mid- to long-term (MLT) retail loans (+RMB 182bn, 29% of total new loans), but offset by lower MTL corporate loans (+RMB 86bn in Nov, only 14% of total new loans). Total RMB deposits in Nov increased by RMB 547bn, after the seasonal drop of RMB 403bn in Oct.

TSF and total RMB new loans already reached RMB 16.1tn/RMB 8.4tn in 11M13, on track to reach the potential full-year scale of RMB 17tn/RMB 9tn, respectively, in our view.

We believe the recent high market interest rates (interbank, investment products, etc.) may have incentivized more non-bank lending (entrusted loans, trust loans, etc). But upcoming regulatory tightening of interbank and WMP (Document No. 9) may weaken non-bank lending (trust, discounted bills, and bank acceptance) going forward.