Growth of savings at Chinese banks in Shanghai in November was at its highest level in nine months amid a correction on the stock market, the central bank said yesterday.

Yuan savings at Chinese banks added 12.33 billion yuan (US$1.67 billion) in November, up 2.36 billion yuan from a year ago, the Shanghai headquarters of the People's Bank of China said in a statement. The growth is the biggest since March.

Most of the new savings are from current deposits, which added 12.07 billion yuan last month, up 1.82 billion yuan from a year ago.

"The current deposits grew rapidly in November as investors shunned the stock market and put their money back in banks," the central bank said.

The benchmark Shanghai Composite Index tumbled 19 percent in November on concerns of a market crash and the central government's moves to curb the assets bubble.

The stock market has been booming since last year when the Shanghai index more than doubled. The index started to see a correction in November after doubling again in the first 10 months of this year.

Total deposits, yuan or foreign currency, added 102.56 billion yuan at all financial institutions in Shanghai, setting a record high for monthly deposits growth.

Meanwhile, the yuan credit at overseas banks in Shanghai also grew rapidly.

New yuan lending at overseas banks in Shanghai topped 13.09 billion yuan, up 5.97 billion yuan from a year ago, the central bank said.

About 94.5 percent of loans were made to manufacturing, property, business rental and commercial industries. Non-locally incorporated overseas banks saw a rapid yuan lending growth last month, accounting for 70.8 percent of the new yuan lending.

Yuan-backed lending to deposits ratio topped 156.7 percent at the end of November at overseas banks in Shanghai, up 27.4 percentage points from the end of 2006.

Overseas banks are required to trim the figure to 75 percent by 2011. The higher the ratio, the higher risk exposure and higher profits prospect.

The outstanding value of yuan lending at overseas banks in the city grew 87 percent to the end of November.

(Shanghai Daily December 11, 2007)