Industrial Bank loan growth cut by half

China's tightening trims down lending to $125bln as bank aims keeping bad loan ratio below 0.58%.

Industrial Bank's outstanding credit is targeted to increase 22 percent to 855 billion yuan ($125 billion) this year compared with 40 percent growth in 2009, according to figures provided by the bank in its earnings statement to the Shanghai stock exchange on 3 March. HSBC Plc unit Hang Seng Bank Ltd. owns 12.8 percent of Industrial Bank.

China's banks loaned a record 9.59 trillion yuan ($1.4 trillion) last year to support the government's economic stimulus plan to sustain growth amid the global financial crisis. The central bank has ordered lenders to set aside more deposits as reserves twice this year, and regulators have said they will rein in credit expansion to avert asset bubbles and restrain inflation.

"Banks are facing a tighter policy environment in 2010 than in 2009" as the government switches its focus to managing inflationary expectations and changing the structure of growth, the bank said in its statement. "Lending in China this year will revert to steady growth from a rapid pace in 2009."

View the full story in Business Week.

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