Of the total loan amount, China Merchants Securities, the country's 12th-largest broker by net assets, took 350 million yuan, Orient Securities received 600 million yuan and Huatai Securities secured 500 million yuan.

The brokers won their loans from state lenders, including the biggest, Industrial and Commercial Bank of China, and China Construction Bank, and not from the central bank as state media had reported, company executives said.

But executives gave no breakdown for the banks' loans.

``The loan is not a bailout,'' said a Shenzhen-based Merchants Securities executive surnamed Xiong.

``It will be used purely for business purposes, such as investing in stocks,'' he said.

Executives with Nanjing-based Huatai and Shanghai-based Orient Securities confirmed the loans, but declined to elaborate.

Over the past year, Beijing has shut or arranged the takeover of about 20 small or mid-sized securities houses, and one major one: fifth-ranked China Southern Securities. But the government is also helping relatively healthier securities houses pursue new businesses such as asset management, and providing them with the capital to do so.

China Merchants Securities, a broking arm of ports-to-roads conglomerate China Merchants Group, won regulatory approval last month to buy an overseas affiliate, becoming the country's first to embark on such an expansion.

The official Shanghai Securities News reported Tuesday that Merchants Securities had asked for one billion yuan and Orient Securities and Huatai had each asked for two billion yuan.

``We don't know if we will get further loans,'' Xiong said.

``It all depends totally on demand. If our business does well, we may ask for more.''

Reforming the lumbering securities sector is crucial if Beijing is to succeed also in reforming its banks, analysts said.

According to the China Securities Association, 90 percent of the nation's brokers posted a combined loss of 15 billion yuan last year.

Now, brokers face increasing competition from expanding rivals such as Credit Lyonnais Securities Asia and BNP Paribas, and nascent investment banking ventures formed by Goldman Sachs and others.

REUTERS