China May new yuan loans 1.11 trln yuan, more than expected

BEIJING, June 14 (Reuters) - Chinese banks extended 1.11 trillion yuan ($163.4 billion) in net new yuan loans in May, above analysts’ expectations.

Analysts polled by Reuters had predicted new yuan loans of 900 billion yuan, down from 1.1 trillion yuan in April.

Broad M2 money supply (M2) grew 9.6 percent in May from a year earlier, central bank data showed on Wednesday, missing forecasts for an expansion of 10.4 percent and compared with April’s 10.5 percent.

Outstanding yuan loans grew at 12.9 percent by month-end on an annual basis.

Analysts polled by Reuters had expected outstanding loans to rise by 12.8 percent, after April’s 12.9 percent.

China’s banks extended a record 12.65 trillion yuan in loans in 2016 as the government encouraged credit-fueled stimulus to meet its economic growth target.

The credit explosion has stoked worries about financial risks from a rapid build-up in debt, which authorities have pledged to contain this year. ($1 = 6.7940 Chinese yuan) (Reporting by Beijing Monitoring Desk and Kevin Yao; Editing by Jacqueline Wong)