China's big four banks cut loans in November

China's big four state-owned commercial banks have reduced new loans in November. This comes after October's new lending dropped to the lowest level of the year.

The big four represent more than three quarters of the total assets, and 80 percent of the total savings and lendings of China's entire banking system.

Bank of China, ICBC, the Agricultural Bank of China, and China Construction Bank have told CCTV that their combined new loans in November dropped slightly from October to 100 billion yuan.

The total new loan amount throughout the country is estimated to be around 200 billion yuan.

Professor Zhao Xijun, China Renmin University, said, "For banks, lending at the end of the year won't make the balance sheets look good, because profits will not come in until next year, while capital is already reduced. So banks prefer to lending in the beginning of next year. I expect tighter credit in the last month. But the total new loans throughout the whole year may easily exceed the 10-trillion yuan threshold."

In the first 10 months of 2009, Chinese commercial banks lent out a total 8.9 trillion yuan. That's 2.5 times the amount of the same period last year.

Some financial institutions have almost run out of capital, especially shareholding banks and city commercial banks. Further credit expansion appears difficult.