China’s five biggest state-run banks cut deposit rates on Friday as Beijing strengthened efforts to protect lenders’ profitability and provide a buffer against further economic headwinds amid flagging growth.
Chinese banks including the Industrial and Commercial Bank of China, China Construction Bank and Bank of China reduced one-year deposit rates to 1.45 per cent, and three-year rates to 1.95 per cent, according to the banks’ websites. The cuts, down 0.1 per cent and 0.25 per cent from September, respectively, were also made by the Agricultural Bank of China and Bank of Communications.
The co-ordinated round of deposit rate cuts on Friday, the third this year, will help reduce interest payment costs for China’s biggest banks, which are suffering historically low net interest margins, a critical gauge of profitability.