China TSF underwhelms in April at RMB1.05 tn

However, bond financing bounced back.

It has been noted that China TSF in April amounted to RMB 1.05tn (vs. RMB 1.18tn in March), lower than Bloomberg consensus of RMB 1.2tn.

According to a research note from Barclays, new RMB loans granted to the real economy increased by RMB 805bn in the month (vs. RMB 996bn in March).

Off-balance sheet financing including trust loans and bankers’ acceptance continued to shrink on a monthly basis amid tighter regulation, while new entrusted loans reached 3-year low of RMB 34bn (vs. RMB 111bn in March and a monthly average of RMB 184bn over the past three years).

Here's more from Barclays:

Surprisingly, new corporate bonds increased to RMB 155bn in April, after an average of RMB 68bn in the past two months, likely due to corporates taking advantage of lower market interest rate environment to issue more bonds after several monetary easing measures introduced by the PBOC, in our view.

Slower loan growth on declining loans to non-bank FIs and less new corporate loans - April new RMB loans (including loans to non-bank FIs) amounted to RMB 708bn (vs. RMB 1.18tn in March), below Bloomberg consensus of RMB 903bn.

The slower m/m new loan growth was due to a contraction in loans to non-bank FIs (-RMB 93bn in April vs. +RMB 192 in March) and a slowdown in corporate loans (+RMB 510bn vs. +RMB 730bn).

Among the corporate loans, short-term loans was the main driver for slower growth (RMB 70bn in April vs. RMB 307bn in March) while mid- to long-term also decelerated (RMB 278bn in April vs. RMB 364bn in March).