Credit extended by China's banks in April may have dropped to above 600 billion yuan (about US$87.85 billion) after staying at above 1 trillion yuan for three staight months, industry insiders said.

Despite the sharp month-on-month decline, the scale and growth of the April new loans was "more reasonable" than that in the first three months this year, said Tuesday's China Securities Journal, citing unidentified sources with banks.

China's new yuan-denominated loans hit 4.58 trillion yuan (US$670 billion) in the first quarter, according to figures from the People's Bank of China, the central bank. In March alone, new credit loans increased 1.89 trillion yuan.

The country's "big four" state-owned commercial banks, including Industrial and Commercial Bank of China, the world's largest bank by market value, are estimated to have lent more than 250 billion yuan in April, while smaller banks have lent about 400 billion yuan, said the sources.

Medium- and long-term loans would have accounted for a larger proportion in the April new loans, while the scale of bill financing would fall sharply, said analysts.

It is also forecasted that new loans in May and June will not see a dramatic decline from the April level, according to Li Gang, expert with Agricultural Bank of China.

The average new loans for the rest months of the year will be around 300 billion yuan, he said.

(Xinhua News Agency May 5, 2009)