Here are the effects of symmetric rate cuts on China banks

It's in line with economic stability efforts.

The People's Bank of China (PBOC) announced on 28 February 2015 symmetrical rate cuts of 25bps in the benchmark rates (BMR) of loans and deposits of all tenures except the demand deposit rate effective 1 March 2015.

According to a research note from Barclays, in addition, the central bank also further raised the deposit rate ceiling from 1.2x to 1.3x, indicating an acceleration of deposit rate liberalization.

The report said that these rate cuts were widely expected and confirmed Barclays' view that the government will likely keep an accommodative monetary environment in 2015 to stabilize the economy and create an environment conducive to structural reforms.

Here's more from Barclays:

In the meantime, we see the acceleration of the deposit rate liberalization (to 1.3x from 1.2x only after only a few months) adding pressure on bank earnings.

We estimate these rate cuts will lower, on average, 2015E and 2016E NIMs and net profits by 3.5bps/11.3bps and 2.3%/7.3%, respectively if we assume banks maintain their deposit rates at the 1.2x ceiling.

However, 2015-16 may be the last pain for NIMs before full liberalization is achieved. In addition, the rate cuts would likely reduce the tail risk of a hard landing for the economy and, thus, create room for the government to push forward long-term reforms.

We maintain our moderately positive stance on China bank stocks on a 12-month horizon.