Chinese Banks See Outflows of Household Deposits in April as Consumption and Housing Demand Recovers

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Official data from the Chinese central bank points to a sizeable contraction in household deposits in the month of April, with analysts saying that lending data points to a recovery in consumption and housing demand following the COVID-19 outbreak.

Data from the People’s Bank of Data (PBOC) indicates that renminbi deposits saw a rise of 1.27 trillion yuan in the month of April, for an expansion of 1.01 trillion yuan compared to the same period last year.

Household deposits fell by 799.6 billion yuan that month however, translating into daily deposit outflows of 26.6 billion yuan.

This compares to a daily increase in household deposits of 71.0 billion yuan during the first three months of 2020, for a total rise of 6.47 trillion yuan.

Chen Li (陈雳), researcher from Chuancai Securities (川财证券) said to Shanghai Securities Journal that “the recovery of consumption was a key factor in the reduction in household deposits in April.”

Chen pointed in particular to the ongoing rise in short-term lending to households in April, which saw an increase of 228 billion yuan that month.

Household medium and long-term borrowing was 666.9 billion yuan in April, most of which was comprised of mortgages, serving as a major destination for much of the decline in household deposits.

Data from the Beike Research Institute (贝壳研究院) indicates that in April the pre-owned housing market saw an ongoing recovery in key Chinese cities.

For 18 key Chinese cities Lianjia Real Estate reported an on-month rise in pre-owned home transactions of 43.1%, and a YoY rise of 17.6%.

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