BEIJING (Dow Jones)--Agricultural Bank of China Ltd.'s new lending nearly quadrupled in the first half to CNY858.9 billion (US$126 billion) amid a government-backed credit loosening to reinvigorate the economy.
The state-backed bank said its new lending in the January-June period this year rose CNY639.6 billion from a year earlier. The increase came as new loans in China's banking sector jumped CNY4.92 trillion in the first half, or tripled, from a year earlier to CNY7.37 trillion.
Outstanding new loans at the end of June were 28.1% higher than at the start of the year at CNY243.2 billion, Agricultural Bank said in a statement on its Web site.
New micro-lending to individual farmers totaled CNY34 billion in the first half, seven times the amount in full-year 2008, said the statement, which was dated Friday.
The surge in micro-lending came after the bank set up a department specifically to manage its 2,048 rural sub-branches in March last year with the aim of boosting rural lending.
Agricultural Bank said all 37 of its first-tier branches were profitable in the first half, but didn't elaborate. Nor did it provide figures for its overall first-half earnings.
In the first half last year, the bank's pretax profit rose 39% from the year-earlier period to CNY54.3 billion, according to previously issued data.
However, the bank's earnings this year may not be comparable with last year because Agricultural Bank became a joint stockholding company in January through a government recapitalization.
Central Huijin Investment Co., a unit of China's sovereign-wealth fund, pumped $19 billion into the bank in November to take over a 50% stake from the Ministry of Finance, which holds the remaining 50% stake.
As part of the overhaul, the ministry allowed the bank to dispose of around CNY800 billion worth of impaired assets to a separate fund to help clean up its balance sheet. The ministry and the bank jointly manage the fund.
The statement didn't give any information on the bank's planned public listing. The People's Bank of China, the central bank, said last week it will push ahead with the plan for Agricultural Bank to introduce strategic investment in the second half.
Agricultural Bank said in the statement its assets totaled CNY8.48 trillion at the end of June, up CNY1.46 trillion, or 20.9%, from the beginning of the year.
Liabilities totaled CNY8.16 trillion at the end of June, up CNY1.44 trillion, or 21.45%, from the beginning of the year.
It said its nonperforming loans and NPL ratio - bad loans as a percentage of overall loans - both fell in the first half, but it didn't give details.
Agricultural Bank said earlier its NPL ratio fell to 4.32% at the end of last year from 23.57% a year earlier, following the transfer of bad loans to the separate fund during its restructuring.
