HSBC Holdings Plc. (00005.HK) has jumped into the renminbi fray, offering record-high yields of as much as 3.8 percent interest per annum for yuan time deposits, Apple Daily reported on Tuesday, citing a person with knowledge of the matter.
According to the lender’s website, the minimum deposit amount is 10,000 yuan (US$6212.36) and the promotional period will last only until May.
The bank’s move was driven not so much by rising demand for renminbi loans as by competition, an unnamed senior executive from a large bank was quoted as saying. Industrial and Commercial Bank of China (Asia) Ltd. (ICBC Asia) and China Construction Bank (Asia) Co. Ltd (CCB Asia) have attracted large amounts of renminbi deposits after raising the interest rates for some products recently, the executive said.
Another market insider speculated that HSBC may have seen low returns on certain investment products and encountered renminbi shortage amid recent volatility in the currency’s exchange rates.
Meanwhile, more banks may join the price war, according to some bankers. China CITIC Bank International Ltd. and DBS Bank (Hong Kong) Ltd. also unveiled promotional high-yield RMB time deposit products on Monday.
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