ICBC's May loan growth slows to 50 billion yuan
Updated: 2009-05-26 07:15
(HK Edition)
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Industrial & Commercial Bank of China Ltd, the world's largest lender by market value, said new loans granted this month have slowed to more than 50 billion yuan.
Chairman Jiang Jianqing said during the bank's annual shareholders meeting yesterday that the amount of new loans granted this month was lower compared to April's total of 51.5 billion yuan.
In March, the bank said it planned to extend up to 530 billion yuan in new loans this year.
The bank's shares were suspended from trading yesterday in Shanghai for the meeting.
Mainland banks gave out a record 5.17 trillion yuan ($758 billion) of loans between January to April this year, almost triple the amount of a year earlier, as the government called on state- owned lenders to help support efforts to bolster an economy that grew at the slowest pace in almost a decade in the first quarter. The nation's record lending growth may lead to credit losses for its banks in the future.
"At the heart of these concerns is the recent steep rise in corporate exposure amid concurrent decline in enterprise profits," Fitch Ratings analysts led by Charlene Chu said in a May 21 report. "This means that each CNY invested or lent is unlikely to generate the same return as before, which over time will take its toll on corporate borrowers' ability to repay and lead to credit losses for banks."
More information about corporate profits may come when China Telecom Corp and China Unicom (Hong Kong) Ltd hold annual shareholders meetings today in Hong Kong.
The mainland's benchmark stock index had its first weekly decline in a month last week on concern that this year's rally overvalued prospects for the nation's economic recovery. The Shanghai Composite Index, which tracks the bigger of mainland's exchanges, fell 1.8 percent last week, the first drop since April 24. That decline pared the index's gain so far this year to 43 percent.
Bloomberg News
(HK Edition 05/26/2009 page4)