Nov. 3 (Bloomberg) -- Industrial & Commercial Bank of China Ltd., the nation's largest, led Chinese lenders higher in Hong Kong trading after the government removed loan curbs that have hurt their ability to extend credit.

ICBC rose 5.1 percent to close at HK$3.72. China Construction Bank Corp., the nation's second largest, climbed 2.7 percent to HK$3.80. Bank of China Ltd. closed unchanged at HK$2.34, after rising as much as 8.6 percent.

China's central bank removed temporary loan curbs to maintain stable, ``relatively fast'' economic growth and counter the global financial crisis, the official Xinhua News Agency reported Nov. 1, citing bank spokesman Li Chao. The government has already eased restrictions on lending to small companies and cut interest rates three times this year as the economy expanded at the slowest pace in five years.

``Having loan quotas or not isn't important any more, and the question now is whether there will be effective demand for lending going into next year,'' said Zhang Xi, a Beijing-based analyst at China Galaxy Securities Co. ``But as bank stocks are very cheap now, any news may trigger a rebound in prices.''

Chinese banks are the safest investments among financial stocks worldwide given their limited involvement in U.S. subprime-related investments, Zhang said. The lenders' average profit could still expand 50 percent this year from 2007, though growth may slow to zero next year as demand for loans wanes, she added.

To contact the reporter for this story: Zhang Dingmin in Beijing at Dzhang14@bloomberg.net

Last Updated: November 3, 2008 03:44 EST