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China reports 13% loan growth in 1st quarter

(Xinhua)
Updated: 2007-04-13 11:03

China reported a 13 percent rise in newly-added renminbi loans by financial institutions in the first three months of this year despite new measures to curb loan growth, according to the People's Bank of China, or central bank.

New renminbi loans totaled 1.42 trillion yuan (US$184 billion), an increase of 167.8 billion yuan from the same period last year, the bank said in a report released on Thursday.

Outstanding loans owed to all financial institutions jumped 16.25 percent to 23.96 trillion yuan at the end of March, 1.52 percentage point higher than the same period last year, according to the report.

The bank noted that a total 441.7 billion yuan of RMB loans were added in March, 95.8 billion yuan less than last March.

In a bid to curb loan and economic growth, the bank said last week that required reserve ratio for financial institutions will be raised further by 0.5 percentage points as of April 16 to 10.5 percent.

The bank earlier raised the deposit reserve ratio by the same margins two times in January and February separately and the one-year benchmark interest rates by 0.27 percentage points from March 18.

Analysts said if the growth momentum continued, the newly-added RMB loans for 2007 would be sure to exceed the preset target of 2.9 trillion yuan by the central bank.

Last year the RMB loans soared by 3.18 trillion yuan, 27 percent higher than the target of 2.5 trillion yuan set by the central bank for the whole 2006.

The RMB deposits newly added 1.88 trillion yuan between January and March, a decline of 59.7 billion yuan from the same period last year, according to the report.

The report said deposits at financial institutions increased 880.4 billion yuan in March alone, an increase of 94.3 billion yuan from last March.

The report said outstanding RMB deposits of all financial institutions surged 15.94 percent to 35.42 trillion yuan at the end of March, 3.66 percentage points lower than the same period last year.

The slower growth of deposits came as more Chinese residents are transferring their deposits to the bull equity markets for higher yielding, according to an earlier survey from the central bank.

China's shares extended recorded gains on Thursday as the benchmark Shanghai Composite Index rose 1.02 percent to close at record high of 3,531.03 points. The index has gained more than 29 percent this year after a 130 percent surge last year.