Chinese banks experiencing weak deposit growth
(1 May 2013 – China) Banks in China are experiencing weak deposit growth, with loans increasing at a faster pace so far this year.
China’s largest lender, Industrial and Commercial Bank of China (ICBC) said loans were growing at a faster rate than deposits.
While deposits rose 4.5 percent, loans rose 5.2 percent, according to the bank.
Another big four state-owned bank, Agricultural Bank of China (ABC) reported similar numbers, with its loan book growing around 10 percent faster than its deposit base.
There has been growing competition among banks for savers who are able to deposit large amounts of money, increasing saving rates but meaning margins will likely narrow this year.
AgBank's net interest margin fell to 2.78 percent from 2.81 percent in 2012, while China Construction Bank Corporation (CCBC), another Big Four bank, saw a fall to 2.71 percent from 2.75 percent.
The slowdown in deposit growth comes as a growing portion of retail savings flows into higher-risk Chinese investment tools called wealth management products with the pace picking up since late 2012.
Much of the banks' deposit growth in 2012 had been driven by the growing popularity of wealth management products.
China's banking regulators said they had increased regulation of those products, hampering their growth this year.
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