The balance of loans by banks fell 4.7 percent in May from a year earlier for the 65th straight monthly decline, the Bank of Japan said Monday in a preliminary report.

The average daily balance of bank loans came to 405.41 trillion yen, the lowest level since the BOJ began compiling lending data in July 1991, the central bank said.

The margin of decline was bigger than April’s 4.6 percent, reflecting continued weak corporate demand for funds and a reluctance by banks to extend fresh loans due to their efforts to clean up bad ones.

The data cover banks with nationwide branch networks, known as city banks, as well as trust banks, regional banks and second-tier regional banks.

The loan balance, including “shinkin” credit banks, fell 4.2 percent to 467.22 trillion yen for the 29th straight monthly fall since the BOJ began taking relevant statistics in January 2001.

Adjusted for special factors — loan securitization, exchange-rate fluctuations and allocation of loan-loss reserves — the loan balance, excluding loans by shinkin banks, fell 2.3 percent to 415.66 trillion yen for the 56th consecutive monthly fall.

Before adjustment for special factors, the loan balance fell 7.4 percent at city banks and trust banks but rose 0.8 percent at regional banks.

The balance fell 5.1 percent at second-tier regionals and 1.2 percent at shinkin banks.

The daily balance of real deposits and certificates of deposit at city banks, regionals and second-tier regionals rose 0.4 percent to 486.27 trillion yen.

The outstanding balance of commercial paper at the end of May rose 6.2 percent to 23.13 trillion yen, the highest level on record.

The balance of lending at foreign banks operating in Japan decreased 29.8 percent to 6.88 trillion yen.

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