0915 GMT - The Chinese central bank's decision to trim its five-year loan prime rate should give a boost to new mortgage demand at a time of disappointing property sales, Citi analysts write in a research note. " It will send a strong signal to the market that the regulator aims to stimulate the property market," given that mortgage rates are anchored to the five-year LPR, they say. They estimate that Chinese banks' average 2025 net interest margins and earnings will be lower by 7.5 basis points and 5.5%, respectively, with ICBC, Bank of China and Bank of Chengdu "more vulnerable" in terms of NIM impact. That pressure should be partly offset by a cut in deposit rate last December and in the RRR last month, but overall continued contraction of NIM is likely, the analysts add. (tracy.qu@wsj.com)
(END) Dow Jones Newswires
February 20, 2024 04:15 ET (09:15 GMT)
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