China's ICBC reports huge Jan. lending

BEIJING, Feb. 6 (Chinese media) -- Industrial and Commercial

Bank of China (ICBC) recorded a huge increase in new loans in January as it

answered government calls to support the weakening economy.

ICBC, the country's largest bank, said Thursday it

extended 117.1 billion yuan (17 billion U.S. dollars) of new loans last month,

22 percent of the amount for the whole of 2008.

It noted that 69.3 billion yuan, or 59 percent of the

total, was lent to infrastructure projects including railways, roads, power grid

and nuclear power stations.

Late last year China urged local lenders to increase

credit to support its 4 trillion yuan (586 billion U.S. dollars) stimulus

package aimed at spurring economic growth.

China's economy grew 6.8 percent year-on-year in the

fourth quarter of last year, down from 9 percent in the third quarter and10.4

percent in the first half. The sharp slowdown dragged down the growth for 2008

to a 7-year-low of 9 percent.

The bank also reported a big profit and declines in

both the amount of non-performing loans (NPLs) and the NPL ratio in January,

though no specific figures were given.

Factors driving the good performance include

government measures to boost domestic demand and stimulate economy and a

moderately loose monetary policy, it said.

The big increase in new loans showed the government

measures have yielded initial results and the positive effects are spreading to

the real economy, it stated.

The Purchasing Managers' Index of manufacturing rose

to 45.3 in January from 41.2 in December, following a record low of 38.8 in

November, the China Federation of Logistics and Purchasing said Wednesday,

providing evidence the economy was on the road to a recovery.

The lender added it has beefed up risk control while

expanding business.

Officials and analysts have warned that domestic

banks might face rising bad loans this year as they record huge increases in new

loans in the worsening economic conditions.

Shares of ICBC in Shanghai rose 0.8 percent to 3.83

yuan at 11:10 a.m. Beijing time.