China's major state-owned banks stepped up lending to support the real economy in the first half of 2022 (H1), with more new loans flowing to infrastructure development, manufacturing, and other key economic drivers.

The latest semi-annual reports of the six largest state-owned commercial banks showed that four of them issued more than 1 trillion yuan (about 144.73 billion U.S. dollars) of new loans in H1.

New domestic yuan loans of the Industrial and Commercial Bank of China (ICBC), China's biggest commercial lender, reached 1.61 trillion yuan during the first six months, while that of the Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB) stood at 1.6 trillion yuan, 1.02 trillion yuan and 1.54 trillion yuan, respectively.

Sectors including infrastructure development, manufacturing, strategic emerging, inclusive finance and green finance got the most loans, according to the banks.

Data showed that major banks ramped up their credit support for infrastructure development, as investment in this sector is deemed important for underpinning economic growth.

By the end of June, the CCB saw the balance of infrastructure-related loans hit 5.5 trillion yuan, accounting for nearly 52 percent of its corporate loans.

New loans issued by the ABC to fund the building of major projects in H1 totaled 404.2 billion yuan, an increase of 67.1 billion yuan year on year.

Credit support for key economic driving sectors such as manufacturing, also flowed at a faster pace in H1. In the first six months, new loans issued by the ICBC to the manufacturing industry amounted to 628.1 billion yuan, 3.5 times that of the same period last year.

Inclusive loans sustained faster growth despite a higher base, the banks said. The BOC's inclusive loans to micro and small firms in H1 increased by 223.5 billion yuan, surging 41.38 percent year on year.

Even with more lending, banks saw an improvement in asset quality, their reports noted. By the end of June, the non-performing loan ratio of four banks inched down, while that of the Postal Savings Bank of China remained flat compared to last year, and that of the BOC edged up 0.01 percentage points compared with the beginning of the year.

Gu Shu, chairman of the ABC, attributed such steady performance partly to the effective implementation of China's macro-economic policies designed to ensure the smooth operation of market entities.

Since the beginning of the year, the country has rolled out a slew of measures, including the combination of tax and fee cuts and tax credit refunds. Official data showed that China's value-added tax credit refunds exceeded 2 trillion yuan by July 20, more than three times the total amount recorded last year.

Looking ahead, bank executives said that they would continue strengthening credit allocation to expand investment and promote consumption.

Lin Jingzhen, executive vice president of the BOC, said the bank would take advantage of opportunities to step up financial support for transport, power generation, water conservancy and other major infrastructure projects. 

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