Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

China Banks to Stay Disciplined on Loan Pricing, Daiwa’s Wu Says

Don't Miss Out —
Follow us on:

Oct. 12 (Bloomberg) -- Chinese banks will undertake more “disciplined” loan pricing as smaller lenders’ capital constraints keep them from offering deeper discounts on credit, Daiwa Capital Markets said.

The People’s Bank of China in July began to allow lending at 30 percent less than officially set rates in an effort to revive growth amid six straight quarters of economic slowdown. China’s biggest banks are limiting discounts for their best corporate clients to 10 percent of the benchmark, officials at the top four lenders told Bloomberg News.

“Smaller banks are not in a position to compete given their capital shortage, provisioning pressures, and deposit constraints,” Hong Kong-based Grace Wu wrote in a note dated Oct. 11.

A squeeze on net interest margins, a measure of lending profitability, from the liberalization of interest rates may not be as bad as some investors expect because less than 10 percent of new loans this year are priced at a discount, she wrote.

To contact Bloomberg News staff for this story: Aipeng Soo in Beijing at asoo4@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.