As stocks continued to decline yesterday for the third day, investors have started to put their money into banks because they have lost confidence in the market.

The country's central bank said that new yuan savings have risen for six straight months up to July. New yuan savings in Shanghai rose 10.81 billion yuan (US$1.58 billion) in July from June and jumped 20.7 billion yuan from a year ago, the Shanghai headquarters of the People's Bank of China said.

Term deposits took the biggest chunk of the increase in savings, indicating that clients preferred to make long-term deposits at banks.

The Shanghai Composite Index has lost almost half its value so far this year. With the stock market unlikely to recover in the near future, bank deposits are likely to rise, said industry watchers.

Banks are lending more to the services industry, which accounted for about 90 percent of the increase in new loans during the month.

Individual mortgage lending at domestic banks rose 2.8 billion yuan in July, a drop of 3.07 billion yuan from a year ago.

Among the new credit, 1.38 billion yuan went to newly built properties and the balance of 1.42 billion yuan for second-hand homes.

Auto loans rose rapidly last month, with new loans rising 350 million yuan in July, the highest in four years.

(Shanghai Daily August 13, 2008)