Rates on de­posits

Ever­bright Bank cuts

China Daily (Canada) - - FRONT PAGE - By BLOOMBERG

China Ever­bright Bank Co be­came the first listed lender to cut de­posit rates from a max­i­mum level al­lowed since Novem­ber, a sign com­pe­ti­tion for sav­ings may be eas­ing as the cen­tral bank boosts liq­uid­ity and the econ­omy fal­ters.

Ever­bright Bank last week low­ered its one-year de­posit rate to 3.16 per­cent from 3.3 per­cent, the Bei­jin­glen­der said in a state­ment.

The lender is, at least for the mo­ment, re­treat­ing from the com­pe­ti­tion for de­posits, which has in­ten­si­fied as money pours into In­ter­net funds, in­vest­ment prod­ucts and stocks.

Ever­bright Bank acted on the day a cut of the re­serve re­quire­ment ra­tio added as much as 600 bil­lion yuan ($96 bil­lion) to the bank­ing sys­tem, ac­cord­ing to Australia & New Zealand Bank­ing Group Ltd es­ti­mates.

“This is a very in­ter­est­ing move­andI think oth­ers will fol­low suit,” said Tang Yayun, a Shang­hai-based an­a­lyst atNorth­east Se­cu­ri­ties Co.

“Pres­sure on at­tract­ing de­posits is com­ing off re­cently with a slew of eas­ing mea­sures— at the same time, with the econ­omy do­ing so badly, banks are find­ing it hard to lend that money out.”

The cen­tral bank last month changed the way it cal­cu­lates banks’ loan-tode­posit ra­tios by in­clud­ing in­ter­bank de­posits and lend­ing for the first time, giv­ing some banks scope to ex­tend more credit.

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