The interest rates on the deposits of workers and peasants, China Construction Communications, China Merchants Bank, and other banks were officially lowered today, and the large-amount certificates of deposit of some banks were also lowered
Finance Associated Press, December 22 (Reporter Gao Ping) Following the reduction in September, the deposit interest rates of large banks and some joint-stock banks were lowered again today. As far as large banks are concerned, the 3-year and 5-year fixed deposit listed interest rates have the highest decline, at 25BP. At the same time, the reporter of the Financial Associated Press learned that some banks' large-value certificates of deposit have also been adjusted, with a maximum decline of 30BP.
For this downward adjustment, industry insiders said that the main reason is that the pressure on bank interest margins continues to be under pressure, which is not conducive to the sustainable service of the real economy by banks, and it is necessary to reduce the cost of bank liabilities to hedge. In the previous adjustment, joint-stock banks generally followed up or adjusted at the same time as state-owned banks, while local banks adjusted in stages.
A number of large banks and joint-stock banks have "joined hands" to reduce the fixed deposit listing interest rate by 25BP for 3-year and 5-year periods
The reporter of the Financial Associated Press learned that the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, the Construction Bank and other major banks have lowered the listed interest rates of RMB deposits since today. Among them, the listed interest rate of one-year and less lump sum time deposits was reduced by 0.1%, the listed interest rate of two-year lump sum deposit and lump sum time deposits was reduced by 0.2%, and the listed interest rates of three-year and five-year lump sum time deposits were reduced by 0.25%.
After the adjustment, the 3-year time deposit rate fell below 2%, from 2.2% to 1.95%. In addition, the listed interest rates of 3-month, 6-month, 1-year, 2-year and 5-year time deposits were reduced to 1.15%, 1.35%, 1.45%, 1.65% and 2.0% respectively after adjustment.
For example, the staff of the Bank of China told the Financial Associated Press reporter that from December 22, 2023, the bank will adjust the listed interest rate of RMB deposits, which will be 1.15% for three months, 1.35% for half a year, 1.45% for one year, 1.65% for two years, 1.95% for three years, and 2% for five years. Prior to that, they were 1.25%, 1.45%, 1.55%, 1.85%, 2.2%, and 2.25%, respectively. CCB Bank staff also said that the listed interest rate of RMB deposits will be lowered from December 22.
As of press time, the official websites of ICBC, Agricultural Bank of China, and Bank of Communications have updated the new deposit listing rates.
At the same time, there are also joint-stock banks that have lowered their prices together with the big banks today. On December 22, the listed interest rates of 1-year, 2-year, 3-year and 5-year lump sum deposit and withdrawal time deposits of China Merchants Bank were 1.45%, 1.65%, 1.95% and 2%. Prior to that, it was 1.55%, 1.85%, 2.2% and 2.25%, respectively. Similar to the big banks, the 1-year tenor was reduced by 10 bp, and the 2-year, 3-year, and 5-year tenors were reduced by 20 bp, 25 bp, and 25 bp, respectively.
The adjustment of the listed deposit interest rate by major banks and some joint-stock banks is also the third reduction since the beginning of this year. Previously, a number of national commercial banks lowered the listed interest rates on deposits from September 1, including 10 basis points for one-year deposits, 20 basis points for two-year periods, and 25 basis points for three-year and five-year time deposits. Overall, in the last adjustment, a number of joint-stock banks and large banks made downward adjustments on the same day. Earlier, that is, in a downward adjustment on June 8 this year, large banks took the lead in adjusting, of which the 2-year period was reduced by 10BP, and the 3-year and 5-year periods were both reduced by 15BP, and then the joint-stock banks followed up with the adjustment.
Some banks' large-value certificates of deposit have also been lowered by up to 30BP
In addition to the adjustment of the listed interest rate of deposits, the interest rates of other deposits have also been adjusted. ICBC said that in addition to adjusting the listed interest rate on deposits, the bank has also optimized the prime interest rate level for call deposits and time deposits (including large-amount certificates of deposit). The staff of China Construction Bank told the Financial Associated Press reporter on the evening of December 21 that the adjustment of the listed interest rate mainly involves agreement deposits, call deposits, time deposits and large-amount certificates of deposit.
After comparing the relevant information of the mobile banking APP, the reporter of the Financial Associated Press found that the interest rate of large certificates of deposit of many banks has been adjusted, of which the highest decline has reached 30BP. On December 21, among the large-value certificates of deposit displayed on the ICBC mobile banking APP, the highest interest rate for 3-year was 2.65%, 2.15% for 2-year, 1.9% for 1-year, and 1.6%, 1.6% and 1.8% for 1-month, 3-month and 6-month certificates of deposit respectively. On December 22, as of press time, or due to update reasons, the ICBC mobile APP showed that there was no product in the column of large-value certificates of deposit.
In addition, on December 21, the mobile banking app of the Agricultural Bank of China showed that the interest rates on large-amount certificates of deposit for 1 month, 3 months, 6 months, 1 year, 2 years and 3 years were 1.6%, 1.6%, 1.8%, 1.9%, 2.15% and 2.65% respectively. On December 22, the bank's interest rates on 1-month, 3-month, 6-month, 1-year, 2-year and 3-year certificates of deposit were adjusted to 1.5%, 1.5%, 1.7%, 1.8%, 1.9% and 2.35% respectively. 10BP for one year and less, 25BP for 2 years, and 30BP for three years.
On December 21, the maximum annual interest rate of 1-month to 3-year large-denomination certificates of deposit of China Construction Bank was 2.65%, and the maximum annual interest rate of special deposits for 3-month to 5-year deposits was 2.65%. On December 22, the maximum annual interest rate of 1-month to 3-year large-amount certificates of deposit of CCB was 2.35%, the maximum annual interest rate of characteristic deposits for 3-5 years was 2.4%, the maximum annual interest rate for large-amount deposits was reduced by 30BP, and the maximum interest rate for characteristic deposits was reduced by 25B.
Liang Fengjie, an analyst at Zheshang Securities, believes that the main reason is that the pressure on bank interest margins continues to be under pressure, which is not conducive to the sustainable service of the real economy by banks. Since the fourth quarter, the interest rate cut of existing mortgages has been promoted, and the effect of the LPR interest rate cut in early 2024 will be reflected, which will cause the interest rate spread of listed banks to continue to decline by 12BP from the low level in the third quarter of 2023. In addition, to resolve local debt risks, it is expected that banks will follow the principle of capital preservation and small profits, which will also lead to additional pressure on interest margins. However, bank earnings continue to be under pressure, which is not conducive to the sustainability of serving the real economy, so it is necessary to reduce the cost of bank liabilities to hedge.
(Finance Associated Press reporter Gao Ping)