China Banks: June TSF and new loans remain soft; more policy support expected in 2H

Research evidence excerpt

China Banks: June TSF and new loans remain soft; more policy support expected in 2H

Deutsche Bank

Research

Asia Industry Date

China 16 July 2026

China Banks

Banking / Finance Periodical

Banks

June TSF and new loans remain soft;

more policy support expected in 2H

Johnny Xie, CPA

June TSF and RMB loans remained weak despite improved seasonality Research Analyst

June Total Social Financing (TSF) and RMB loans improved sequentially due to +852-220-36141

quarter-end seasonality, but the overall credit impulse remained softer than last

year. Monthly TSF and new RMB loan additions in June came in at RMB3.4tn and

RMB1.6tn, respectively, rebounding from May’s RMB2.0tn and RMB520bn.

However, both figures were below June 2025 levels and consensus estimates,

while outstanding TSF and loan growth slowed further to 7.4% and 5.2%,

respectively, with loan balance growth reaching a new historical low.

TSF in June was RMB3.4tn, up from RMB2.0tn in May but below RMB4.2tn in June

last year and the RMB3.7tn consensus. The TSF balance growth was 7.4% YoY,

decelerating from 7.7% in May. The structure largely aligned with previous months,

with government, corporate bonds and equity financing still the key support, while

loan contribution continued to weaken.

n Government bond issuance slowed to RMB768bn in June from RMB1.2tn

in May. While government bonds remain the largest contributor to TSF after

loans, this slower sequential run rate suggests that more fiscal support is

likely to be deployed in 2H26 to stabilize economic growth.

n Corporate bond issuance increased to RMB401bn in June, up from

RMB242bn last year and RMB168bn in May. This improving momentum

suggests corporations are now utilizing the low-interest-rate environment

to lower financing costs.