Lending by banks logged a year-on-year decline of 5.2 percent in October, marking the 58th straight month of decline, the Bank of Japan said Monday.
The average daily lending balance for the month came to 416.61 trillion yen, according to a preliminary report released by the central bank.
The decline was attributed by analysts to weak demand among businesses for new capital investment funds, allied to a reluctance by banks to lend due to the need to book large loan-loss charges amid a fragile economy.
The figures cover banks with nationwide branch networks, known as city banks, as well as trust banks, regional banks and second-tier regional banks.
When adjusted for special factors — such as loan securitization, exchange-rate fluctuations and the allocation of loan-loss reserves — lending by banks fell 2.6 percent to 428.01 trillion yen in October, down for the 49th month in a row, the BOJ said.
On an unadjusted basis, the October average daily lending balance, including the balance of loans by “shinkin” credit banks, fell 4.9 percent to 479.13 trillion yen, down for the 22nd straight month.
The margin of decline is the largest on record. The BOJ began compiling data related to the combined balance at banks and shinkin banks in January 2001.
The unadjusted balance at city banks and trust banks fell 8.3 percent to 242.79 trillion yen, while that at regional banks inched down 0.2 percent to 130.73 trillion yen.
The lending balance at second-tier regional banks dropped 2 percent to 43.09 trillion yen, while that of shinkin banks fell 3.1 percent to 62.52 trillion yen.
The daily balance of real deposits and certificates of deposit at city banks, regional banks and second-tier regional banks rose 1.8 percent in October to 478.89 trillion yen.
The outstanding balance of commercial paper at the end of October fell 0.8 percent to 20.93 trillion yen.
The balance of lending at foreign banks here increased 3.8 percent to 7.10 trillion yen.
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