BEIJING (Reuters) - China’s largest commercial lender, Industrial and Commercial Bank of China (ICBC), has signed agreements with 100 private companies pledging more financing support, according to a source with direct knowledge of the matter.
The agreements signed on Oct. 16 with the companies, most of which are large, publicly listed and existing clients, provide them with more efficient, nationwide financing services, said the person, who declined to be named as the bank’s client information is confidential.
ICBC declined to comment on the matter.
As Beijing looks to boost economic growth, it has encouraged banks to provide sufficient credit to the real economy, specifically private firms.
ICBC’s move indicates state banks are taking steps to implement the policy, though it suggests larger firms are still key beneficiaries of a renewed lending push, while more vulnerable small private firms continue to struggle for financing.
Many China-listed firms have seen their share prices tumbling this year, adding financing pressure to companies in a slowing economy. The Shanghai stock index is down 24.8 percent so far this year, while the CSI300 has fallen 24.5 percent. Shanghai stocks have declined 11.9 percent so far this month.
ICBC also signed debt-for-equity agreements with some of the private firms to reduce their debt burden, the person said.
The closed-door signing event was hosted by ICBC Chairman Yi Huiman and President Gu Shu, the person added. The bank’s current lending exposure to the private sector is about 2 trillion yuan ($288.16 billion).
The private firms operate in a range of industries including technology, agriculture, environmental protection, manufacturing, textiles and supply-chain.
($1 = 6.9405 Chinese yuan)
Reporting By Shu Zhang and Elias Glenn; Editing by Gopakumar Warrier