China’s Major Banks Cut Deposit Rates to Protect Profitability

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China’s state-owned banks are attempting to protect their profit margins while at the same time heeding government directives to shore up support to the world’s second-largest economy. Photo: Bloomberg

(Bloomberg) — China’s major banks made a coordinated cut in deposit rates for the third time in a year, as lenders move to protect business profitability amid government policies aimed to boost consumption and demand.

State-controlled banking giants Industrial & Commercial Bank of China Ltd., Bank of China Ltd, and Agricultural Bank of China Ltd. were among the lenders that cut rates for customers, according to online statements. The one-year annualized rate for deposits was lowered by 10 basis points to 1.55%, while the five-year rate was cut by 25 basis points to 2.25%.