Banks' Net Interest Margins May Gradually Bottom

The net interest margins of commercial banks may gradually approach the bottom range after the average fell to a historic low of 1.54% in Q1, 21st Century Business Herald reported citing analysts. The 15bp fall in Q1 had narrowed from the 17bp decline over the same period last year, as many banks reduced deposit-side interest expenses by lowering rates on three- and five-year deposit products, while increasing lending to SMEs, green and technology sectors to boost loan interest income, the newspaper said citing an unnamed banker. However, a source from a city commercial bank told the Herald that net interest margins may face further pressure in the near term, as they predicted an average 35-40bp decline in housing mortgage rates.