＜Research＞JPM: CN Banks' Deposit Rate Cuts Confirm Focus Shift to NIM Mgmt

　　The announcement by six major state-owned banks (SOE banks) of China on 25 July to cut deposit interest rates was unsurprising, as it had been covered in the media earlier, JP Morgan issued a report saying.

　　The broker upheld its positive view on China banks, as the net impact of deposit rate and LPR cuts is +2bps on NIM and +2% on earnings on the broker‘s 2025 estimates. Also, the rapid reduction in deposit rates also confirmed the broker’s view that regulators and banks are focusing more on stabilizing NIMs. The broker viewed that future interest rate cuts will be symmetrical, and that deposit rate cuts will be accompanied by LPR cuts. Moreover, since the regulators are clamping down on banks' artificial intervention in interest rates, the reduction in deposit interest rates will be implemented more effectively than before.

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　　JP Morgan expected that China banks will continue to outperform, and that the large SOE banks will continue to outperform the joint-stock banks and regional banks, because only the large SOE banks announced a reduction in interest rates.

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