Advertisement
China Construction Bank
BusinessBanking & Finance

China Construction Bank sees more policy support from Beijing, despite pressure on state-owned lenders to boost profit

  • ‘There is room for more policy support, and big banks need to continue to support the real economy,’ CCB chief financial officer Sheng Liurong said
  • He said China’s financial regulators could continue to lower financing costs as a means to shore up confidence

Reading Time:2 minutes
Why you can trust SCMP
China Construction Bank, the country’s second-largest bank by assets, remains confident in the strategic policy measures being pursued by Beijing. Photo: Shutterstock
Aileen ChuangandYuke Xiein Beijing
China Construction Bank (CCB) expects Beijing to introduce more policy support to bolster the economy, even as the nation’s major state-owned lenders continue to face pressure to boost profits amid the prospect of benchmark rates decreasing further.
Advertisement

“China’s economy is showing signs of recovery, but there is room for more policy support, and big banks need to continue to support the real economy,” CCB chief financial officer Sheng Liurong said on Tuesday during the bank’s latest financial results briefing.

Sheng said China’s financial regulators could continue to lower financing costs as a means to shore up confidence. Key benchmarks, including banks’ reserve requirement ratios (RRR) and loan prime rates (LPR) – the pegs for household, corporate and mortgage loans – could see further cuts in the coming months, he added.

That view by CCB, the country’s second-largest bank by assets, reflects the confidence of major state-owned lenders in the strategic policy measures being pursued by Beijing.

A security guard walks outside the People’s Bank of China headquarters in Beijing on March 6, 2024. Photo: AP
A security guard walks outside the People’s Bank of China headquarters in Beijing on March 6, 2024. Photo: AP
In February, the People’s Bank of China (PBOC) unveiled a 25-basis-point cut to the five-year LPR, a key mortgage benchmark, to boost housing demand, marking the most significant cut that the mainland’s central bank has made since it revamped the system in 2019. The PBOC last cut the rate by 10 basis points in June.
Advertisement
That measure followed the central bank’s announcement in January, cutting the RRR by 50 basis points from February 5, in a bid to inject 1 trillion yuan (US$138 billion) worth of liquidity into the market.
Advertisement