The average daily balance of bank lending expanded 0.9 percent in October from a year earlier for the third straight month, after adjustment for special factors, the Bank of Japan said Wednesday.

The October lending balance stood at 387.11 trillion yen.

The string of rising numbers adds to evidence that financial institutions are becoming more willing to lend as the economy recovers.

The lending balance, excluding loans by "shinkin" savings-and-loan banks, was adjusted for special factors -- loan securitization, exchange rate fluctuations and allocation of loan-loss reserves.

The bank lending balance rose in August for the first time since the central bank began compiling adjusted data in October 1998.

Before adjustment for special factors, the loan balance fell 0.7 percent in October, down for seven years and 10 months in a row.

But the margin of decline was the smallest since March 1997, when lending registered a 1.7 percent drop.

The October balance of loans at banks came to 380.93 trillion yen before adjustment for special factors.

The figure applies to city banks with nationwide branch networks, trust banks, long-term credit banks, regional banks and second-tier regional banks.

Including shinkin, the balance shrank 0.6 percent to 442.85 trillion yen, down for the 58th straight month. But the margin of decline was the smallest since January 2001, when comparable data were first compiled.

The loan balance dropped 2.7 percent at city banks, long-term credit banks and trust banks, but rose 1.8 percent at regional banks and second-tier regional banks.