Deposit Interest Rates To Lower Further

Chinese banks will likely continue to cut deposit interest rates further to reduce funding costs, even after the third round of deposit rate cuts this year starting last week, Financial News reported citing analysts. The rates of time deposits for one-year, two-year, as well as three- and five-year were cut by 0.1, 0.2, and 0.25 percentage points by six major state-owned banks. This provides downward space for loan interest rates next year, and banks’ net-interest margins, which have been under continuous pressure, are also expected to stabilise. The average net-interest margin of commercial banks was 1.73% by end-Q3, a decrease of 0.21 pp from the same period last year, data by National Administration of Financial Regulation showed.