China banks to cut rates on mortgages, deposits

STIMULUS PUSH | This is the latest of state-directed steps to shore up growth

CHINA'S LARGEST BANKS are preparing to cut interest rates on existing mortgages and deposits, the latest state-directed measures to shore up growth in the world's second-largest economy.

An announcement that big state-owned lenders are reducing rates on the majority of the nation's 38.6 trillion yuan ($5.3 trillion) of outstanding mortgages may come as soon as Tuesday, according to sources. The reductions will only affect loans on first homes, two of the sources said. Lenders such as Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp.are poised to cut deposit rates later this week for the third time in a year, people familiar said. The moves are part of a targeted push by Beijing to spur consumer spending, drive more funds into the stock market and alleviate pressure on lenders' profit margins.