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The average daily balance of bank loans expanded 1.5 percent in the fiscal year that ended March 31 from the previous year to 386.20 trillion yen, the first rise in 10 years, the Bank of Japan said Wednesday.

Bank lending last increased in fiscal 1996, when the average daily balance rose 0.4 percent. The margin of growth was the largest since the BOJ began compiling comparable annual data in fiscal 1993.

The figure is believed to have increased due to robust demand for corporate capital and housing loans as the economy recovers.

In fiscal 2006, lending by banks with national networks climbed 0.5 percent, posting the first expansion since fiscal 1995, when the loan balance rose 0.6 percent.

Lending by regional banks rose 2.7 percent in fiscal 2006 for the second straight yearly gain, the BOJ said.

After adjustment for special factors, the overall loan balance rose 2.4 percent in fiscal 2006, also for the second consecutive yearly rise.

The loan balance, excluding loans by “shinkin” credit cooperatives, was adjusted for special factors — loan securitization, exchange-rate fluctuations and the allocation of loan-loss reserves.

In March alone, the average daily balance of bank lending gained 1.1 percent to 390.34 trillion yen from the previous year, for the 14th straight monthly gain.

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