Zhong Guo Jin Rong Xin Xi Wang·2025-07-01 11:56Core Insights - The report from the Bank of China Research Institute indicates that the net interest margin (NIM) of Chinese commercial banks is expected to be 1.43% in Q1 2025, a year-on-year decrease of 0.11 percentage points, marking a historical low [1] - However, the downward trend in NIM is expected to ease compared to the same period in 2024, with pressures on interest income anticipated to persist in the first three quarters of 2025 but with some alleviation [1] Group 1: Factors Affecting Net Interest Margin - The decline in NIM is attributed to several factors: the adjustment of the Loan Prime Rate (LPR) leading to the repricing of existing loans, the orderly resolution of implicit debt, and weakened demand increasing pricing pressure on bank assets [2] - Positive factors contributing to alleviating the downward pressure on NIM include major banks reducing deposit rates, with significant cuts in both current and fixed deposit rates in May 2025 [2] Group 2: Loan Rates and Trends - The weighted average interest rate for new corporate loans in March 2025 was 3.26%, down 0.47 percentage points year-on-year, while the rate for new personal housing loans was 3.13%, down 0.56 percentage points year-on-year [1] - The report suggests that the pricing of new loans is stabilizing, indicating a potential shift in the interest rate environment [1] Group 3: Profitability Outlook - It is projected that the net profit and operating income of commercial banks in the first three quarters of 2025 will remain largely unchanged compared to the same period in 2024 [3]