Fitch Ratings said it was “growing increasingly wary” about China’s banking industry amid fears that record lending growth and weaker corporate losses will lead to credit losses for banks, Bloomberg reported. Corporate loans made up more than 90% of the record US$758 billion lend out in the first four months of the year, but China’s state-owned companies posted a 32% year-on-year decline in profit over the same period. “This means that each CNY invested or lent is unlikely to generate the same return as before, which over time will take its toll on corporate borrowers’ ability to repay and lead to credit losses for banks,” Fitch analysts said in a report. Premier Wen Jiabao wants banks to boost lending by at least US$732.8 billion in 2009 and this has stoked fears of rising non-performing loans (NPLs) and asset bubbles. Fitch believes the slow recognition of credit losses leads to an under-capturing of NPLs, delayed credit costs and inflated capital.