Chinese banks likely to cut deposit rate again to keep NIM at reasonable level – state media
MACRO
Chinese banks likely to cut deposit rate again to keep NIM at reasonable level – state media
MACRO

Chinese banks likely to cut deposit rate again to keep NIM at reasonable level – state media

 

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As China has further cut one-year loan prime rate (LPR), Chinese commercial banks will likely cut deposit interest rates again to keep net interest margin (NIM) at a reasonable level, said state media China Securities Journal, citing industry insiders.

Compared to the decline in banks’ return on asset, the drops in their deposit costs have dropped at a slower pace, the report said.

According to data released by China’s financial regulators, commercial banks’ NIM reached 1.74% in the second quarter, marking a low level in recent years, it said.

In order to further lower the real economy’s borrowing costs, the pressure on banks’ liability cost needs to be eased and deposit interest rate will likely be lower again, the report said.