FINANCE

Chinese Banks Slash Loan Rates in Year-End Push, Raising Risk Concerns

Published: Nov. 25, 2025 6:22 p.m. GMT+8

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Banks have recently continued to cut interest rates on business loans.

Chinese banks are racing to expand their loan books before the year ends, slashing interest rates on property-backed business loans and loosening lending standards in ways that analysts say could amplify financial risks, Caixin has learned.

Just weeks ago, a Beijing resident surnamed Chen was told her application to boost a property-collateralized business loan might not be approved because her home was slightly above the bank’s age limit.

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Chinese banks are rapidly expanding property-backed business loans, slashing rates to as low as 2% and raising loan-to-value (LTV) ratios to 85% to meet year-end targets.
Government interest subsidies lower effective rates for borrowers but may not extend beyond the first year, increasing future payment risks.
Looser standards and increased LTV ratios in a declining property market may intensify financial risks and encourage fraudulent loan applications.

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Who’s Who

Industrial and Commercial Bank of China: Industrial and Commercial Bank of China (ICBC) is one of the major state-owned lenders actively offering property-backed business loans with rates around 2.45%. This is part of a nationwide trend where Chinese banks are loosening lending standards and lowering interest rates to expand their loan books before the year ends, potentially amplifying financial risks.

China Construction Bank: China Construction Bank is one of the major state-owned lenders currently offering property-backed business loan rates around 2.45%. These competitive rates are part of a broader trend among Chinese banks to expand their loan books aggressively before year-end, driven by fiscal support and a push to meet 2025 targets.

Bank of China: The Bank of China is one of the major state-owned lenders in China. It is currently offering property-backed business loans with interest rates around 2.45%. This is part of a nationwide effort by Chinese banks to expand their loan books and meet year-end targets, driven by fiscal support and interest-subsidy programs.

AI generated, for reference only