China March bank lending seen at 800 bln - paper

SHANGHAI, March 19 Sun Mar 18, 2012 8:13pm EDT

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SHANGHAI, March 19 (Reuters) - New yuan loans by Chinese banks is expected to reach about 800 billion yuan ($126.53 billion) in March, the China Securities Journal reported on Monday, citing industry sources and analysts.

If the estimate is accurate, that means total new loans issued in the first quarter may fall short of the 2.4 trillion yuan target, the paper said.

Total lending was 738 billion yuan in January and 710.7 billion yuan in February - falling short of market expectations in both months.

Although lending in March is expected to rise from the previous months, bad debt ratio may also increase on the back of weakening economic growth and in turn dent banks willingness to lend, the paper said.

Weak lending will put pressure on the central bank to cut banks' reserve requirement ratio further.

Data earlier in this month showed China's inflation, factory output and retail sales all cooled more than expected in February, giving the central bank more leeway to loosen policy to support flagging growth.

The People's Bank of China's monetary policy for the fourth quarter of 2011 said that its forecast of 14 percent broad money growth for 2012 was consistent with 8.5 trillion yuan in new bank lending. ($1 = 6.3227 Chinese yuan) (Reporting by Fayen Wong and Lu Jianxin; Editing by Ramya Venugopal)

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