CHINA S four largest banks expect to issue loans totalling nearly 3 trillion yuan (US$456.83 billion) this year, almost unchanged from last year, according to bankers with knowledge of the matter.
The combined loan target of the big four lenders Industrial and Commercial Bank of China, Bank of China, China Construction Bank, and Agricultural Bank of China suggests the banking sector aims to maintain its loan approval targets despite the Central Government s efforts to contain inflation.
The big four combined extended 3.1 trillion yuan in loans last year. Normally, loans by the top four lenders account for 35 to 40 percent of the national total and their ambitious loan targets signal credit expansion of more than 7.5 trillion yuan nationwide in 2011.
New loans of 7.5 trillion yuan this year appear to be a big number since the Central Government is determined to tighten monetary policies, said Orient Securities analyst Jin Lin. The sticking point is whether the banks would have enough funds to support that loan growth.
Chinese banks extended a record 9.6 trillion yuan in loans in 2009 followed by 7.95 trillion yuan last year. In 2009, credit issued by the banks was nearly double the government s target of 5 trillion yuan while last year s number also exceeded the government s preferred quota of 7.5 trillion yuan.
A full-year loan quota is seen as a key economic tool that the government uses to control fixed-asset investment and consumer prices.
(SD-Agencies)
