Photo: By remkotanis on Flickr
SHANGHAI (Reuters) – China’s top four banks extended 70 billion yuan ($11 billion) of new local-currency loans during the first half of August, up from 50 billion yuan in the same period a month earlier, an official newspaper reported on Monday.However the pickup in new lending by the Big Four, which typically account for 30-40 per cent of total bank lending, does not mean other banks are extending loans at a similar pace, the Shanghai Securities News said, citing unidentified sources.
China’s Big Four banks are Industrial and Commercial Bank of China Ltd <601398.SS><1398.HK>, China Construction Bank Corp <601939.SS><0939.HK>, Bank of China Ltd <601988.SS> <3988.HK> and Agricultural Bank of China Ltd <601288.SS> <1288.HK>.
New yuan loans extended by all Chinese banks in July came to 540.1 billion yuan, the lowest level in 10 months.
Chinese banks grant loans at the central government’s behest, and money and credit numbers have become the most closely watched data as they reveal both policy aims and the state of credit demand.
The central bank has cut 150 basis points from the required reserve ratio in three steps since November last year, freeing up an estimated 1.2 trillion yuan for new lending. It has also cut interest rates twice this year.
Many analysts expect the central bank to ease monetary policy imminently to boost lending and support growth, with some anticipating action as soon as this weekend. ($1 = 6.3585 Chinese yuan)
(Reporting by Kazunori Takada; Editing by Edwina Gibbs)
Business Insider Emails & Alerts
Site highlights each day to your inbox.