Declines in bank deposits and new loans in July were mainly due to seasonal factors and not a cause for concern, according to financial analysts.

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The renminbi deposits of the four largest lenders by assets declined by 1.5 trillion yuan ($243 billion) in July from an increase of 2.2 trillion yuan in June. During the same period, the big four State-owned banks' new yuan loans also fell to 210 billion yuan from 290 billion yuan, Shanghai Securities News, one of the leading Chinese financial newspapers, reported on Tuesday.

Bank of Communications Co Ltd estimated in a research report on July 31 that China's new yuan loans reached 780 billion yuan in July, falling from 1.08 trillion yuan in the previous month.

Xu Bo, a financial researcher at Bank of Communications, said there was a sudden rise of yuan deposits and new yuan loans in the banking sector in June because of seasonal factors.

According to Chinese banking regulations, the regulator assesses the banks' financial performance in the first half of a year at the end of June. New yuan loans usually show marked growth in June and fall in the following month, as past figures show. The same reason also caused yuan deposits to drop in July.

In addition, the growth of new yuan loans in June this year was fueled by a package of monetary stimulus measures such as targeted cuts of the reserve requirement ratio, Xu said.

Mu Hua, banking analyst of Guangzhou-based GF Securities Co Ltd, said deposit outflows in July mainly occurred in resident savings, with a large part shifting to wealth management products.

To meet the banking regulator's requirements, the banks set the maturity date for wealth management products around the end of June so clients will deposit money back in the bank at that time.

Once the banks have passed the regulator's assessment, the deposits will be diverted back to wealth management products. Such a deposit decline occurs in the first month of each quarter, not just in July this year, Mu said.

Yuan deposits dropped by 1.5 trillion yuan in July, accounting for 40 percent of the 3.79-trillion-yuan deposit increase in June. In terms of a proportion, the decrease is not as large as the one in January when yuan deposits declined by 940.2 billion yuan, accounting for 82 percent of the 1.15-trillion-yuan increase in December 2013, the central bank figures revealed.

"Although the deposit drop of 1.5 trillion yuan is quite large, it is not that significant compared with the decrease in other months if measured by the proportion of the deposit drop in a particular month to the deposit increase in the previous month," Mu said.

Apart from going to wealth management products, part of the deposits may also flow into the stock market, which has been performing well recently, she said.

Li Kai, banking analyst at China Galaxy Securities Co Ltd, said monetary policy will remain slightly loose in the second half of this year and new loans will continue to grow moderately. He estimated that new yuan loans will not exceed 10 trillion yuan in 2014.