China Rate Cut to Hurt Bank Profit, ICBC’s Jiang Says
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China’s cut in interest rates will squeeze banks’ margins, says the head of the world’s most profitable lender.
People’s Bank of China raised the cap on what banks can pay customers for deposits to 120 percent of the benchmark from 110 percent, as it announced a 0.4 percentage point reduction in the one-year lending rate and a 0.25 percentage point cut in the 12-month deposit rate. This will mean depositors’ returns will be unchanged if lenders raise rates to the new ceiling.