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Story summary
- Chinese commercial banks now price corporate loans with the interbank repo rate instead of the loan prime rate.
- Average net interest margin fell to a record low of about 1.4 percent in Q1 2026.
- Regulators deem a 1.8 percent margin necessary for healthy, self-funded capital growth.
- Dong Ximiao warned the transition could be painful, citing repo rates around 1.38 percent versus a 3 percent LPR.
