According to data released by the People’s Bank of China (PBOC), new RMB loans in December 2014 were about 697 billion RMB, up about +45% YoY but down -18% vs. November 2014. The month’s data was decidedly weaker than expectations of about 880 billion RMB. Total RMB loan growth for the year was 9.8 trillion RMB, up 890 billion RMB vs. 2013 (+10% YoY).

Total social financing for December 2014 was 1.7 trillion RMB (about +35% YoY, +48% MoM), beating estimates of 1.2 trillion RMB. For the full year, social financing was 16.5 trillion RMB (about -5% YoY).

The PBOC also released money supply data, which included M2 growth of +12.2% YoY (down slightly vs. +12.3% in November), the third consecutive month of a slowdown in the YoY pace. Narrower definitions of the money supply, M1 and M0, were also weaker than earlier periods. China’s M1 money supply growth was +3.2% YoY (unchanged vs. October and November), a marked slowdown vs. Q3’s +5.7% average. The narrowest definition of money supply, M0, fell to a +2.9% YoY pace (vs. +3.5% in November), the fourth consecutive monthly slide lower.

On balance, the news was clearly mixed (stronger social financing than expected, but weaker loan growth). The PBOC’s recent policy moves (a rate cut in late November, encouraging banks to lend), seem to be doing little to encourage banks to lend, which might raise questions about the quality of bank loan books. There have been headlines recently concerning the possibledefault of a mainland Chinese property developer, something which may be sending shockwaves through China’s financial system. Although reported NPL ratios have been hovering around 1%, banks’ apparent reluctance to lend suggests the figure might not be reflective of the real situation.

Another reason for banks to be wary could be the disruptive potential for private banks, the first of which received final approval in mid-December. That concern is valid; after Alibaba’s (NYSE:BABA) Yu’e Bao savings product proved just how yield-hungry China’s savers were in 2013 (and how willing they were to trust a non-State owned bank with their money), China’s major banks are likely paying very close attention.

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