2010-11-17 14:45

China is likely to set a target for new local-currency loans at about 6-7 trillion yuan next year, a lower ceiling than this year, local media reported, citing several unidentified sources.

Chinese banks are on track to overshoot this year's new credit target of 7.5 trillion yuan ($1.1 trillion) after they lent 6.9 trillion yuan in the first 10 months.

The report by Caixin magazine was in line with the general expectation of analysts and investors that China will slow credit growth next year. The annual loan target is normally announced in March.

The central bank has gradually guided its monetary stance back to normal after an unprecedented lending spree last year to counter the global financial crisis. Banks issued 9.6 trillion yuan in new loans in 2009.

An unnamed bank executive quoted by Caixin said that lenders would only be able to push for a higher loan quota if they have a bigger volume of deposits to ensure they stay under the 75 percent loan-to-deposit maximum ratio set by regulators.

"We are having meetings every week, and branch heads keep talking about attracting more deposits," the banker said.