THE Bank of China will not relax its lending policy although a weaker credit demand amid a slowing economy may hurt its growth.

BOC has no plan to relax its lending policy, Li Lihui, president of the Beijing-based lender, said at a board meeting yesterday. The nation's third-biggest bank by assets expects a steady but slower loan growth this year from last year, and will seek to improve the lending structure.

"BOC will provide financing support to national major projects, ongoing construction projects and affordable housing for low-income people this year," Li said. "However, the lending amount will not be comparable to the scale of the economic stimulus in 2009."

He added that BOC "hasn't been ordered to increase lending by the State Council," referring to China's Cabinet.

"We don't want lending to be volatile at the end of the month or the quarter. We hope it to remain stable," Li added.

BOC had said its new loans fell 17 percent on an annual basis to 247 billion yuan (US$39 billion) in the first quarter of this year, and its non-performing loan ratio also declined.

The Chinese banks' aggregated yuan loans fell sharply to 682 billion yuan in April from 1 trillion yuan in March, according to data published by the People's Bank of China.

China's biggest lenders may fall short of lending targets for the first time in seven years as the economic slowdown crimps demand for loans, Shanghai Securities News said earlier.

This has led some analysts to call for a cut in interest rates.

Source:shanghaidaily