China's small and medium banks cut deposit rates to ease margin pressure

Beijing Shanghai( Reuters) – A slew of small and mid-sized banks are following their big peers and slashing deposit rates in the first broad move since to ease the pressure on margins after successive loan rate cuts . The cut in deposit rates, the main source of funding for Chinese banks, underlines the role that lower benchmark borrowing rates are in reviving lending in the struggling world’s second-largest economy Constraints on demand and growth analysts and bankers say is for traction. This week, a number of Chinese city and rural commercial banks cut interest rates on a series of deposits on the banks’ websites, according to a statement released. Bank of Nanjing Co Ltd on Thursday cut the three-month deposit rate by 5 basis points (bps) to 1. %, go through bps one year to 1.20% and by 5 year deposit bps to 2.20%, according to a statement on its website. Smaller lenders followed in the footsteps of some of China’s iggest state-owned banks, which implemented a rate cut earlier this month. This comes after the central bank cut the one-year lending prime rate (LPR) in August, cutting the benchmark lending rate by 5 percentage points. basis points and will cut the five-year LPR, which affects mortgages, by a larger margin. However, efforts to boost credit to boost demand for a slowing economy have yet to have the desired effect. “Now the banks are facing the same problem, which is the lack of demand for credit,” said a person at a regional bank, who declined to be named, Because he was not authorized to speak to the media. The person added that there is a shortage of loan customers, making cost control an important issue for banks. Nationwide Bank Expansion 1. Ten thousand billion ($35.10 According to the Chinese Bank data showed that new yuan-denominated loans fell short of analysts’ expectations in August, while broad credit growth slowed.