Major Chinese banks are making a strategic move to ease margin pressure by cutting high-yield deposit products. This decision comes as a response to the government's urging to support a slowing economy. The Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (AgBank) are among the major banks that have removed five-year, large-scale certificates of deposit (CDs) with high yields. These banks now offer shorter-term CDs ranging from six months to three years, with interest rates around 1.2% to 1.8%. This shift provides banks with the flexibility to potentially lower lending rates, addressing the challenge of shrinking profit margins. The move follows similar actions by smaller banks in China's Inner Mongolia and Yunnan regions, which had already begun removing five-year fixed-term deposits and lowering rates on shorter-term products. This trend highlights the ongoing efforts of Chinese banks to navigate the complex economic landscape and support the nation's economic growth.
