Latest news with #ChinaMerchantsBank
South China Morning Post
23-05-2025
- Business
- South China Morning Post
‘A bit lost': China's savers search for options after deposit rate cuts
After a landmark decision by China's biggest banks this week to slash one-year deposit rates below 1 per cent for the first time, households across the country are grappling with a pressing question: where should they park their money? Advertisement The dilemma arose for risk-averse savers after six major state-owned lenders and leading joint-stock bank China Merchants Bank (CMB) announced on Monday they would cut their one-year fixed deposit rate to 0.95 per cent, eliminating what was once a safe, if modest, source of passive income. Smaller banks have followed suit, trimming rates across maturities, albeit to a smaller degree. Their one-year rate stands at 1.15 per cent, while three-year rates are at 1.3 per cent. For millions of Chinese families, the decline in deposit yields makes an already challenging financial landscape all the more slippery. Households are wracked with economic uncertainty while facing weak income prospects and a lack of attractive investment options. 'Since the rate cuts, we've seen a surge in clients asking what to do next. Many lament that the days of relying on bank deposits for steady returns are over,' said Liu, a client manager at a Shanghai branch of CMB who requested partial anonymity. Advertisement The move, the seventh such adjustment among China's leading banks since September 2022, officially ushered the country's deposit rates into the sub-1 per cent era.
Bloomberg
20-05-2025
- Business
- Bloomberg
China Banks Trim Deposit Rates Again to Shore Up Profitability
Several major Chinese banks have cut their deposit rates in the latest efforts to reduce funding costs and preserve their shrinking profitability. Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and China Merchants Bank Co. have trimmed rates across tenors on Tuesday with those on one and two-year fixed deposits falling by 15 basis points, according to updates on their mobile apps. Interest rates on three and five-year deposits were slashed by 25 basis points.
South China Morning Post
30-04-2025
- Business
- South China Morning Post
Hong Kong stocks mirror contraction in China PMI data
Hong Kong stocks fell on Wednesday after an official report showed manufacturing in China contracted in April amid the tariff conflict with the US. Advertisement The Hang Seng Index dropped 0.6 per cent to 21,868.38 at 9.55am local time. The Hang Seng Tech Index eased 0.3 per cent. On the mainland, the CSI 300 Index eased 0.1 per cent and the Shanghai Composite Index lost 0.2 per cent. Onshore markets will be closed for the Labour Day holiday for three days from Thursday to Monday. China Merchants Bank slumped 5.2 per cent to HK$42.15, ICBC dropped 4.2 per cent HK$5.25 and Bank of China declined 2.3 per cent to HK$4.26 following poor earnings results. Bucking the downward trend, insurance giant AIA gained 5 per cent to HK$57.30 after it reported stellar new business growth in Hong Kong and mainland China. Rival China Life advanced 2.3 per cent to HK$14.30. China's purchasing managers' index fell to 49 in April. Photo: Reuters The purchasing managers' index, a survey of sentiment among Chinese factory owners, fell to 49 in April, the National Bureau of Statistics said, down from 50.5 in March and short of the consensus estimate of 49.7. A reading below 50 indicates contraction.
Reuters
08-04-2025
- Business
- Reuters
Fitch raises China major state banks ratings
BEIJING, April 8 (Reuters) - Global ratings agency Fitch revised outlooks for China's five major state banks and China Merchants Bank ( opens new tab to stable from negative on Tuesday, despite the downgrade of China's sovereign rating last week. The Chinese government still retains financial flexibility to support the sector including the six banks, even during higher deficits and rising debt, Fitch said.
Reuters
01-04-2025
- Business
- Reuters
Chinese banks hike consumer loan rates in abrupt reversal as bad debt risks mount
BEIJING, April 1 (Reuters) - Some Chinese banks have started raising interest rates amid growing bad consumer loans in a dramatic U-turn just weeks after slashing them to unprecedented lows, a move that is expected to weigh on Beijing's efforts to stimulate a sluggish economy. Banks including China Construction Bank ( opens new tab, China Merchants Bank ( opens new tab, Bank of China ( opens new tab, and Hua Xia Bank ( opens new tab have raised rates on consumer loans to at least 3%, according to bank officials and online applications. The new rates come into effect from Tuesday. Just last month, banks cut rates to a record low of about 2.5%, in response to Beijing's push to expand consumer credit and boost demand to revive its $18 trillion economy, especially as trade tensions with the U.S. intensified. China's leadership has identified spurring consumption as a priority to achieve a roughly 5% growth target for 2025. China's biggest state-owned banks said on Sunday they plan to raise a combined 520 billion yuan ($71.54 billion) in private placements to boost their ability to bolster the real economy. However, a move to higher rates could deter borrowing as consumer confidence remains fragile in the world's second-largest economy, analysts warned. A loan officer at a state-owned bank noted that cheaper loans had their downside too as they were likely to end up raising debt burdens for financially stretched borrowers, potentially making a big dent in banks' asset quality. There are concerns that some borrowers are using lower-priced consumer loans to refinance higher-rate mortgages rather than solely for consumption, the loan officer added, speaking on condition of anonymity due to the sensitivity of the matter. It is not immediately clear if the banks raising these rates have sought and received guidance from regulators. China Construction Bank, Bank of China, China Merchants Bank and Hua Xia Bank did not immediately reply to a Reuters request for comment. Official data shows China's outstanding consumer loans stood at 21 trillion yuan at the end of 2024. "Despite the consumption drive, the government seems worried about financial stability regarding the quickly shrinking net interest margin and worsening asset quality," said Gary Ng, a senior economist at Natixis. China's top lenders reported flat annual profits and lower margins in their 2024 results, while warning of asset quality pressures in their personal loan businesses. RISING BAD LOANS China's top banking regulator urged banks in March to expand consumer lending while maintaining "reasonable" credit limits and interest rates to keep risks controllable. The regulator, the National Financial Regulatory Administration, and China's central bank did not immediately reply to a Reuters request for comment. Personal consumer loans account for just about 2% of the total credit of China's major state-owned banks, versus 20% from mortgages, but the bad loans for this business have been rising. State-owned Industrial and Commercial Bank of China ( opens new tab and Agricultural Bank of China ( opens new tab saw their bad loan ratios in personal lending rise to 2.39% and 1.55% as of end-2024, respectively, the highest since 2020. The issue appeared more severe at mid-sized lenders. Bohai Bank's consumer loan non-performing loan ratio jumped to 12.37% as of end-2024 from 4.44% a year earlier. "The overall risk in personal lending has increased since last year, and we expect continued pressure on asset quality this year," Gu Bin, vice president of Bank of Communications ( opens new tab, said at an earnings press conference last month. Lynn Song, chief economist for Greater China at ING, said China's elevated savings ratio shows households have money but lack the confidence to spend what is saved. "The more important factor will be to restore household confidence, and that starts with healthy wage growth and asset price stabilisation," Song added. ($1 = 7.2685 Chinese yuan)
