Chinese bank stocks fell on Thursday in Hong Kong after a report by Shanghai Securities News that new lending by China’s four biggest state-owned banks was flat in the first two weeks of May.
Shares of Industrial and Commercial Bank of China , China Construction Bankand Bank of Chinadeclined nearly 3 percent each by 3.30 pm Hong Kong time (7.30 am GMT).
“It’s not that banks don’t have money to lend but the market is focusing on the demand side of the story,” said Phillip Chan, Director at Shenyin Wanguo Securities in Hong Kong. “They’re looking at the fact that there is continued weakness in the economy and there is generally less credit demand this year.”
According to Shanghai Securities News, two of the big lenders posted higher loans in the two weeks to May 13, while another two saw their loans fall from a month ago.
Chinese banks extended a total of 7.47 trillion yuan ($1.18 trillion) in new loans in 2011, about 6.4 percent lower than the 7.95 trillion of credit extended in 2010.
The news added to growing worries that China’s slowdown is much sharperthan the headline gross domestic product (GDP) number suggests. Bank lending is seen as an important indicator of China’s economy.Page 1 of 2 | Next Page