China bank lending pulls back in September

Chinese bank lending tumbled in September, official figures showed Friday, following a surge in the previous month on government efforts to bolster the slumping economy.

Chinese banks granted 623.2 billion yuan ($99.5 billion) in new loans in September, down from 703.9 billion yuan in August, the People's Bank of China said.

The September figure came in lower than market expectations of 665 billion yuan, according to a median forecast of 15 economists surveyed by Dow Jones Newswires.

However, September's number is still much higher than the 540.1 billion yuan lent out in July.

"Unexpectedly weak bank lending in September was offset by strong growth in other forms of credit," Capital Economics economists said in a note. "But credit overall is not growing at a speed likely to fuel a significant economic rebound."

China has been trying to encourage banks to lend more in a bid to spur growth in the world's second-largest economy, which is suffering a slowdown caused by slumping demand in Europe and the United States as well as weak demand at home.

Policymakers have cut interest rates twice this year and trimmed the amount of cash banks must place in reserve three times since December as they try to boost growth.

However, gross domestic product expanded 7.6 percent in the second quarter this year, the worst performance in three years.

Broadly weak economic data during the past three months has led to concerns the economy may have slowed further. GDP figures for the third quarter through September are due on Thursday.

Capital Economics predicted that the third-quarter GDP growth figure would come in at about 7.1 percent.