China banks April credit data: A notable miss with record retail and corporate loan contraction; prefer Big 4 for defensiveness

Research evidence excerpt

China banks April credit data: A notable miss with record retail and corporate loan contraction; prefer Big 4 for defensiveness

Asia Pacific Equity Research

14 May 2026

China banks

April credit data: A notable miss with record retail and

corporate loan contraction; prefer Big 4 for

defensiveness

April credit data was significantly weaker than expected, with both TSF and new Banks & Financial Services

RMB loans falling well below BBG consensus and JPMe. TSF came in at AC Katherine Lei

Rmb620bn, roughly half of both BBGe of Rmb1.25tn and JPMe of Rmb1.24tn, (852) 2800-8552

while new RMB loans contracted by Rmb10bn against BBGe of Rmb300bn and katherine.lei@jpmorgan.com

JPMe of Rmb271bn. We noted that retail loan (-787bn) and corporate loan (- J.P. Morgan Securities (Asia Pacific) Limited/

870bn) monthly contraction both were the sharpest in recorded history, and J.P. Morgan Broking (Hong Kong) Limited

discounted bills surging to fill the gap - a negative signal for blended loan yields Peter Zhang

and NIM in April. The weakness in April credit creation is partly due to (852) 2800-8557

seasonality, but the magnitude exceeds our expectation. The weak credit data in peter.zhang@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/

April is in contrast to macro data showing strong exports (link) and marginal J.P. Morgan Broking (Hong Kong) Limited

improvement in the housing market (link). We recommend more defensive Lincoln Yu

positioning and prefer the Big 4 banks which have a stronger loan pipeline and (852) 2800 8523

reported sequential NIM rebound in 1Q. lincoln.yu@jpmorgan.com

What we don’t like about the credit data J.P. Morgan Broking (Hong Kong) Limited

Haomin Chen

• TSF missed expectations materially on contraction in loans and bank (86-21) 6106 6347