Chinese state banks cut rates on personal deposits

Several major Chinese banks have cut interest rates on personal deposits from Thursday, according to information posted on their official websites, a move that follows recent cuts in the prime lending rate.

The Industrial and Commercial Bank of China (ICBC), the world’s largest bank by total assets, cut interest rates on three-year deposits by 15 basis points, to 2.6%, according to its website. .

The ICBC also cut the interest rate on three, six, one and five year deposits by 10 basis points, to 1.25%, 1.45%, 1.65% and 2.65%, respectively.

Three other state-owned banks, the Bank of China, the Agricultural Bank of China and the China Construction Bank, also made similar rate cuts, the China Securities Journal reported on Thursday.

The reduction in interest rates on deposits was what was expected after recent cuts in interest rates on loans, Yan Yuejin, director of the Shanghai-based China Research and Development Institute, said in a note. Thursday.

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China cut its benchmark interest rate, the LPR, in January and August this year.

The ICBC also cut the interest rate on three, six, one and five year deposits by 10 basis points, to 1.25%, 1.45%, 1.65% and 2.65%, respectively

Last month, the one-year LPR, which influences most new and outstanding loans in China, fell to 3.65% from 3.7%. The more than five-year LPR, on which many lenders base their mortgage rates, fell 15 basis points to 4.3%.

Major Chinese banks have lowered corporate and mortgage loan yields in response to authorities’ calls to lower financing costs for the corporate sector and home buyers. The cut in deposit rates will help stabilize banks’ profitability and stimulate China’s economic growth, according to analysts.

Article republished from the Chinese state media CGTN within the framework of an agreement between both parties to share content. Link to original article:https://news.cgtn.com/news/2022-09-15/China-s-state-owned-banks-cut-personal-deposit-rates-1dlHbhqAs80/index.html