SHANGHAI, Sept 15 (Reuters) - Five of China's largest banks
cut personal deposit rates from Thursday, according to
information available on the lenders' mobile apps, a move that
could ease the pressure on their margins after recent lending
rate cuts to revive the economy.
The banks, including Industrial and Commercial Bank of China
Ltd (ICBC), the world's largest bank by asset, cut
the interest rate for three-year term deposits by 15 basis
points, the information showed.
The interest rates for one-year and five-year deposits were
lowered by 10 basis points.
The official Securities Times earlier reported that some of
China's big state-owned commercial banks would cut personal
deposit rates from Thursday.
The move comes after China cut its benchmark lending rates
last month, with the one-year loan prime rate (LPR)
lowered by 5 basis points to 3.65% and the
five-year LPR slashed by a bigger margin of 15
basis points to 4.30%.
The world's second-largest economy narrowly avoided
contracting in the second quarter as widespread COVID-19
lockdowns and the slumping property sector badly damaged
consumer and business confidence.
The reduction on deposits rates will help stabilise banks'
profitability and support capitalisation, said Nicholas Zhu, a
banking analyst at Moody's.
"Banks have lowered yields on corporate and mortgage loans
in response to the authorities' call for lower funding costs for
the corporate sector and homebuyers," said Zhu.
"Lowering deposit costs will offset some of the pressure on
NIM (net interest margin) narrowing."
Last month, some of the big banks warned that they are set
to face a squeeze on their profit margins in the second half of
this year, as they respond to Beijing's call to boost lending to
the real economy and debt-laden property sector.
The cut will likely make room for further cuts to the LPR,
wrote Nomura economists in a note.
Other banks that cut their personal deposit rates on
Thursday included China Construction Bank Corp,
Agricultural Bank of China , Bank of Communications
and Bank of China.
(Reporting by Jason Xue, Ziyi Tang and Ryan Woo; Editing by
Sumeet Chatterjee, Muralikumar Anantharaman and Ana Nicolaci da