News from the Finance Office

It is said that the 21st Century Business Herald accounted on Tuesday, Some Chinese banks plan to reduce the size of their loans by 10 to 20% in the year of 2010, even though China's central bank has not cleared up insurance policy for 2011.

As we can see the paper said that China Construction Bank has reduced its loan aim by 10% from 2010, and the state of affairs is the same with some other banks, except for Bank of China, citing an insider from a State-owned bank.

The insider said that Bank of China might carry on its loan spree by lending about 120.75 billion U.S. dollars in 2011. But the newspaper added that this was not confirmed by the bank. Concording to the paper,the bank issued loans totaling about 105.67 billion U.S. dollars in 2010.

Another insider from a listed joint-stock bank told the newspaper that its bank plans to lend 25.67 billion U.S. dollars in 2011, a 10% to 20% step-down from 2010.

The insider also said:" Our bank's control over our loan size has constrained to an unexampled level, we are required to supervise the lending scale by month; but the fact is, we are considering it nearly every day."

The People's Bank of China described on Tuesday that New RMB-denominated was bestowing in China reached 1.2 trillion U.S. dollars in 2010. The figure surpassed the central bank's lending target of 1.13 trillion U.S. dollars for last year.

It is reported that concording to the insider from the State-owned bank,the People's Bank of China has antecedently conveyed that a reasonable lending growth should be within 12% to 13% in 2011.

But as we have known that banks' contracting lending plans came at a time when local governments were ambitious about the 12th Five-Year Plan, produced a dilemma for local bank branches.

Here is one person in charge of lending at a joint-stock bank said that You could decline loan applications from local governments, but they might back away their fiscal deposits at your bank.He also said that it would be hard for banks to deflate the lending balloon without a decelerate in fixed-asset investments.

It is reported that alongside a scale-back in lending, some Chinese banks were thirsty for capital because of tighter demands from the China Banking Regulatory Commission.

Industrial Bank plans to issue up to 2.27 billion U.S. dollars in junior bonds, and the Agricultural Bank of China wants to raise up to 7.75 billion U.S. dollars through the same channel. China Minsheng Banking Co Ltd aims to raise no more than 3.25 billion U.S. dollars through additional issues in the A-share market.

In the end, it is reported that China International Capital Co Ltd expects listed banks' refinancing size to reach 24.15 billion U.S. dollars in the following two year.

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