Story thread · 2 reports / 1 sources

Chinese banks embrace cheaper short-term loan rates despite margin risks

scmp.com · 16hShare

Chinese commercial banks have begun pricing corporate loans against a short-term interbank repo rate rather than the benchmark loan prime rate (LPR), a shift drawing sharp scrutiny from investors worried about the sector’s already thin profitability. The industry’s average net interest margin – the spread between what banks earn on loans and pay out on deposits – slid to a record low of nearly 1.4 per cent in the first quarter, according to official data. That was well below the 1.8 per cent...

First report: Chinese commercial banks gain margin relief, but subdued lending dims outlook — scmp.com, 2d