A worker counts Chinese currency renminbi (RMB) at a bank in Linyi, east China's Shandong Province, Aug. 11, 2015. (Photo/Xinhua)

Consumer lending by listed Chinese banks surged in the first half of this year as borrowing costs fell and mortgage lending contracted.

Outstanding consumer loans tallied CNY37.61 trillion (USD5.16 trillion) at the end of June 30, after jumping 27 percent from the start of the year, according to figures released by 37 listed banks.

Interest rates on consumer and operating loans have fallen significantly since the People’s Bank of China twice cut the benchmark loan prime rate this year. Consumer borrowing costs averaged 3.57 percent at Chinese banks in July, down 79 basis points from a year earlier, according to data from the Rong360 Digital Technology Institute.

Outstanding operating loans stood at CNY6.69 trillion (USD917.7 billion) at 35 banks as of June 30, a 15.6 percent rise from the end of last year and up 3 percentage points from a year ago. 

The balance of loans at 42 listed banks climbed 8 percent to CNY156.73 trillion (USD21.5 trillion) in the first half, while that of personal loans rose 3.1 percent to CNY58.72 trillion.

Over the six months consumer lending growth among large state banks was particularly impressive. To help finance home decorations and cultural travel as well as purchases of electronic goods and cars, Agricultural Bank of China extended CNY490 billion (USD67.2 billion) of credit to support areas such as wholesale and retail, accommodation and catering, resident services, and freight logistics.

Outstanding inclusive loans for small and mid-sized businesses at Bank of Communications increased 19 percent in the first half, while outstanding personal consumer loans jumped 39 percent, with the proportion of both continuously increasing.

At one bank in Guangzhou the interest rate on operating loans issued to SMEs is as low as 2.9 percent, Shanghai Securities News reported. Shanghai Pudong Development Bank came out with a 3.2 percent rate this month, and China Merchants Bank has brought out consumer loans with annualized rates as low as 3.5 percent for SMEs and individual businesses.