China Banks Mull Cutting Deposit Rates as Early as This Week

Bloomberg2024-10-15

China has lowered key policy rates, slashed mortgage costsLenders are under growing pressure from record low marginsChinese banks are set to trim rates on 300 trillion yuan ($42.3 trillion) of ...

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Wilson Tay
2024-10-15
Wilson Tay
Yes
HRHRHRHR
2024-10-15
HRHRHRHR
Rate cuts = borrowing increase ? = stock rise?

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The plans have yet to be finalized, they said.The cuts would mark the second such reduction this year, following the previous round in late July. The People’s Bank of China didn’t immediately respond to a request for a comment.The moves come after China unveiled its biggest package yet to shore up its sputtering economy, slashing policy rates as well as the borrowing costs on $5.3 trillion in outstanding mortgages.The PBOC last month delivered the biggest-ever decrease to the interest rate charged on its one-year policy loans. Governor Pan Gongsheng also said reduction in deposit rates would follow suit.China’s commercial banks have had some leeway in setting their own rates since the central bank scrapped direct control in 2005. The People’s Bank of China, however, maintains substantial sway by setting a ceiling and floor for rates through the interest rate self-disciplinary body.Chinese banks implemented a broad cut in deposit rates in late 2022, the first such move since 2015, after authorities urged them to boost lending. They lowered deposit interest three more times last year.Despite the reductions, the industry’s net interest margins have been falling and hit a record low of 1.54% at the end of June, well below the 1.8% threshold regarded as necessary to maintain reasonable profitability.Bloomberg reported earlier that China is considering injecting up to 1 trillion yuan of capital into its biggest state banks to increase their capacity to support the world’s second-largest economy.","news_type":1,"symbols_score_info":{"000001.SH":1.1,"HSI":1.1,"YINN":1.1}},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":360314446762232,"gmtCreate":1728971816099,"gmtModify":1728971819883,"author":{"id":"4125545119825582","authorId":"4125545119825582","name":"HRHRHRHR","avatar":"https://community-static.tradeup.com/news/f72f7c8c7a3f167c0f03f6041d1ff44f","vip":1,"hat":"https://static.tigerbbs.com/50a4c8d97279fa9f8f1fa9749a6bdff4","crmLevel":12,"crmLevelSwitch":1,"idStr":"4125545119825582","authorIdStr":"4125545119825582"},"htmlText":"Rate cuts = borrowing increase ? = stock rise?&nbsp;","listText":"Rate cuts = borrowing increase ? = stock rise?&nbsp;","text":"Rate cuts = borrowing increase ? = stock rise?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/360314446762232","repostId":1141371449,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":5,"commentSize":2,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.12","shortVersion":"4.35.12","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1141371449","isCrawlerRequest":true}