3 reasons behind China Construction Bank's stable NIM in the past 4 quarters

Loan growth was faster than deposit growth in 2Q13.

According to Barclays, CCB demonstrated its ability to maintain a stable NIM in the past four quarters.

In 2Q13, its NIM was 2.71%, flat q/q (flat in 1Q13, -1bps in 4Q12 and 1bps in 3Q13).

Here's more from Barclays:

We believe it could mainly due to following reasons:

1) Loan growth in 2Q13 (3%) was faster than deposit growth (1.2%), which could benefit the NIM and also triggered a higher loan-to-deposit ratio of 66.6% (compared to 65.5% in 1Q13).

2) In 2Q13, CCB reduced its low yield reverse repo (-30% compared to 1Q13) and high cost interbank liabilities (-12%), including deposits (-12%), placements (-2%) and repo (-15%) from other banks and FIs.

3) The bank has good liquidity so we believe it suffered less negative impact from the interbank interest rate spike in late-June.

While the loan pricing continued to decline (-40bps h/h) in 1H13, reduced cost on deposits (-3bp h/h) and due to banks and other financial institutions (-66bps h/h) mitigated the negative impact on NIM.