(Yicai) Aug. 13 -- This year’s notable narrowing of net interest margin at commercial banks in China eased in the second quarter, mainly thanks to more effective liability cost controls.

Net interest margin -- the difference between what a bank earns on loans and what it pays on deposits -- averaged 1.54 percent in the two months ended June 30, unchanged from the all-time low reached in the first quarter, according to data released by the National Financial Regulatory Administration on Aug. 9.

At joint-stock commercial banks, the figure widened 0.01 percentage point to 1.63 percent, the NFRA data showed. At urban and rural commercial lenders, it was unchanged at 1.45 percent and 1.72 percent, respectively, while at large commercial banks, private lenders, and foreign banks it narrowed to 1.46 percent, 4.21 percent, and 1.46 percent.

The general letup came after liability costs and interest rates on new loans fell, said Lu Zhengwei, chief economist at Industrial Bank. Lower mortgage and deposit rates since earlier in the year are behind the pause, according to Wang Yifeng, chief financial analyst at Everbright Securities.

The weighted average interest rate on newly issued Chinese yuan-denominated loans was 3.68 percent in June, compared with 3.75 percent in March, according to central bank figures.

The deposit cost ratio also narrowed in the quarter amid stringent regulatory measures. Fixed-term deposit rates were lower than at the end of last year as of June 30, according to data from the Rong360 Digital Technology Institute. The longer the term, the steeper the decline.

Commercial banks reported a combined net profit of CNY1.3 trillion (USD181.1 billion) for the first half, a 0.4 percent increase from a year earlier, the NFRA’s data also showed.

Editor: Futura Costaglione