China's State-owned banks have tightened credit supply as higher reserve requirement ratios and other credit controls rein in excess liquidity, China Business News reported on Thursday.

Related readings:  Bank reserve requirement raised for 5th time  China's April new bank lending at 740b yuan  PBOC to keep credit, capital levels in check  Despite tight credit, banks' profits to grow

Loans extended by China's large commercial banks have declined sharply from the first quarter this year. New loans by large national banks in the first quarter accounted for 45.4 percent of total Chinese lending, lower than last year and the beginning of this year, China Business News said.

According to Chinese central bank statistics, new renminbi-denominated loans by large national banks in the first quarter stood at 1.1 trillion yuan ($169 billion). New lending was 1.38 trillion yuan during the same period last year.

"Changes in credit indicate the impact of China's credit adjustments, which include a higher reserve requirement ratio and other tightening credit controls," said Wang Jin, an analyst at Guotai Junan Securities. "As a result, the credit growth of Chinese banks has become slower."

Bank of Communications will focus on credit for individual consumption, small enterprises and central and western China, said Qian Wenhui, deputy head of Bank of Communications, in late April. The bank will also rein in loans for government financing, the real estate sector and industries with overcapacity.