WRAPUP 1-China’s largest bank says some loans not rolled over

* ICBC says lending pace has slowed at end of Jan

* Official newspaper says some banks have recalled loans

* Chinese regulators have demanded more even pace of
lending

By Zhou Xin and Simon Rabinovitch

BEIJING, Jan 27 (BestGrowthStock) – Industrial and Commercial Bank
of China, the country’s largest bank, said it has stopped
rolling over some loans to slow credit growth after a surge at
the start of the year, though it will not halt new lending.

The statement on Wednesday by ICBC (1398.HK: )(601398.SS: ) was
one of the most authoritative yet about a government-directed
clampdown on lending in a week when reports and rumours of
China’s monetary tightening have roiled global markets.

Chinese companies typically borrow for short periods, such
as six months, and then roll the financing over, making ICBC’s
decision not to renew loans tantamount to calling them in.

“ICBC will not rush to lend, nor will it stop lending,” the
bank said. “In the first 20 days of January this year, due to
concentrated capital demand from ongoing projects, the bank’s
credit offering was a bit fast but was still below that of the
same period last year,” it said.

“In the last 10 days of January, due to the expiry and
return of a concentrated volume of existing loans and repayment
of credit card debt, loan growth has eased,” it added.

Chinese banks extended 1.45 trillion yuan ($212 billion) in
new loans during the first 19 days of the year as they
scrambled to front-load lending before policy tightening shut
the door on them, local media reported on Tuesday.

Chinese officials are targeting about 7.5 trillion yuan in
new loans this year after a record 9.6 trillion yuan in 2009,
and have repeatedly insisted that banks should spread their
lending more evenly to avoid the kind of surge that now seems
to be occurring.

Separately, the official Securities Times reported that
Chinese regulators have ordered banks to call back some of the
loans they extended in January, ratcheting up the pressure on
banks to fall in line with official lending targets.

Commercial banks that had issued large amounts of loans
this month were being instructed not only to halt new lending
but also to recall already-issued loans as soon as possible,
the newspaper quoted an unnamed source as saying.

The report said the move means that the new loan total for
January will fall well below market expectations, despite a
burst of lending in the first three weeks of the year.

The newspaper did not provide details on how the loans
would be withdrawn. It gave the example of an unidentified bank
in Beijing that had lent 80 billion yuan in January, 60 billion
yuan above its quota, and was now working to call back all of
the excess funds.

Investment Advice

($1=6.826 Yuan)
(Additional reporting by Aileen Wang; Editing by Tomasz
Janowski)

WRAPUP 1-China’s largest bank says some loans not rolled over