(Yicai Global) Nov. 12 -- Industrial and Commercial Bank of China has extended nearly CNY10 billion (USD1.4 billion) in financing to private companies within one month since penning cooperation agreements with hundreds of leading Chinese firms, the bank said in a statement today.
The net growth in loans of the Beijing-based bank -- one of China's Big Four -- was CNY4.2 billion (USD603.4 million) in a jump of 5.15 percent for the period. Nearly 80,000 of these private companies had positive bank balances by the end of last month in growth of 8 percent from the start of the year. These made up nearly 80 percent of the bank's total financing business clients, with a balance of CNY2.1 trillion (USD302 billion).
The average loan interest rate was 5.1 percent in a new market low, China News Service reported today.
ICBC will approve extra loans worth up to trillions of yuan (hundreds of billions of US dollars) annually, plus CNY2 trillion (USD287 billion) of re-delivered loans after collection, so the bank's output is very large and it needs a good direction for investment, said Hu Hao, its deputy president.
Slowing demand for personal mortgage loans, de-leveraging of state-backed enterprises and tightening of regulation of local government debts makes small and mid-sized companies an undoubtedly good target for bank loans, and the recent idea of the authorities to promote loans to SMEs conforms with market trends and real needs, Hu stated.
This is a good opportunity for Chinese commercial banks to adjust their credit structure to head in the right direction for future development, Hu added.
Editor: Ben Armour