BEIJING (Reuters) - China's biggest banks have lent 1.3 trillion yuan ($209.4 billion) to the country's state-backed margin lender to halt a meltdown in Chinese shares, local media said on Friday, underlining the government's determination to support stock prices.
Financial magazine Caijing cited unnamed sources as saying that 17 commercial Chinese banks had coughed up the cash for China Securities Finance Corp as of Monday, after China's central bank said it wanted to extend funding to the firm.
China Merchants Bank Co (SS:600036) was the biggest financier, lending 186 billion yuan to China Securities Finance, Caijing said.
China Securities Finance is the only institution that provides margin financing loan services to Chinese securities firms, and is seen as an important conduit for the government to counter stock market volatility.
Spooked partly by speculation that China's central bank was about to end its monetary policy easing, China's stock market plunged in the past month by nearly a third at the peak of its sell-off, wiping out around $4 trillion.
The collapse in stock prices sparked China's biggest rescue effort of its equity market, with the government launching a series of moves that included halting initial public offers, and banning firms and their executives from selling shares.
Bloomberg reported separately on Friday that the Chinese margin lender had 2.5 trillion yuan to 3 trillion yuan worth of funding available as of this week to shore up the stock market if needed, citing people familiar with the matter.