China allows five small banks to cut reserves further

Five city banks listed in Hong Kong and mainland China have been allowed to cut their required reserve ratio by an extra 0.5 percentage points as part of fresh efforts to pump up liquidity and aid small firms as China’s economic growth slows, the Securities Times reported on Thursday.

Shanghai-listed Bank of Beijing and Hong Kong-listed Sheng Jing Bank announced the move – which will boost their earnings – via stock exchange statements. The other three are Bank of Nanjing, Bank of Chongqing and Huishang Bank, the newspaper reported, without identifying sources. They have not published any statements, as it is not compulsory for them.

The People’s Bank of China cut the required reserve ratio for all banks on February 4 by 0.5 percentage points, while adding that some city and rural lenders would enjoy an extra cut if they have been lending substantially to small firms. But the central bank had not provided any names.