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Pace of lending fell last month

THE total amount of new yuan loans in Shanghai fell last month, the Shanghai headquarters of the People's Bank of China said yesterday.

Last month, new yuan lending grew 18.5 billion yuan (US$2.7 billion), down 25.56 billion yuan from a year ago and down 74.2 billion yuan from March, the Shanghai headquarters of the central bank said yesterday.

As of the end of last month, the outstanding value of yuan loans was up 19.5 percent from a year ago, down 1.8 percentage points from March. No outstanding loan value was given.

The central bank didn't explain the sharp drop in new loans. However, the decrease didn't come as a surprise as commercial banks were expected to slow their pace of loans after skyrocketing growth in the first quarter.

Lenders dashed to extend credit in the first quarter to back the state stimulus package and to grab early-year profits.

Domestic banks mainly issued new loans to the services industry last month. Excluding discounted bills, new yuan credit issued to the transport and logistics industry totalled 7.44 billion yuan last month.

Individual mortgage loans rose rapidly last month. Domestic banks issued mortgage loans of 3.39 billion yuan last month, a 16-month high.

Corporations and individuals are still putting money into bank accounts despite government attempts to encourage consumption. Individuals often siphon money from stock investments back into deposits accounts before the May Day holiday, when the stock, futures, currency and gold markets are closed.


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