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Auto loans rise despite slower economy

AUTO loans continued to rise in the fourth quarter and were behind the jump in individual loans at Shanghai's domestic banks despite a slower economy, the local banking regulator said yesterday.

Auto loans grew 12.55 percent in the fourth quarter from the previous quarter at domestic banks in the city, said the Shanghai Bureau of the China Banking Regulatory Commission.

The domestic banks' outstanding value of auto loans in Shanghai jumped 62.9 percent year on year to 4.37 billion yuan (US$639.8 million) by the end of 2008, posting the strongest rise among individual consumption loans including credit card loans and mortgages.

"Banks are tapping individuals' consumption potential and encouraging people to take up loans to buy cars," said the local regulator.

In Shanghai, the total individual consumption loans totaled 367.2 billion yuan by the end of 2008, a 20.16-percent rise from a year ago.

The big five state-owned banks still dominate the individual loan market in Shanghai.

But their smaller rivals are eating into their market share which dropped 5.66 percentage points to 53.76 percent at the end of 2008.


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