Hong Kong banks are offering to pay higher interest to compete for renminbi deposits, the Hong Kong Economic Journal reported Wednesday,
These include DBS Bank (Hong Kong) Ltd., ICBC (Asia) Ltd. and Bank of Communications Co. Ltd. (BOCOM) (03328.HK).
BOCOM Hong Kong is offering retail clients up to 4.2 percent interest on one-year certificates of deposit, payable quarterly.
That compares with a 4 percent interest rate for most lenders.
On Tuesday, DBS launched a time-deposit scheme for new renminbi deposits of at least 100,000 yuan.
The increasing competition for renminbi deposits comes despite a fall in offshore interbank offered rates.
Nancy Chan, BOCOM Hong Kong deputy general manager, said interest rates below 4 percent are no longer enough to attract renminbi deposits.
At present, bank customers get 3.68 percent for one-year time deposits.
ICBC Asia offers auto-payroll clients 4 percent for a six-month deposit of 500,000 yuan or more.
Translation by Vey Wong
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