At the beginning of December, when talking about "banks are very anxious to lend to foreign countries", I said that the interest rate cut on bank deposits is coming soon. Half a month later, the prediction unfortunately came true - after three months, the deposit rate ushered in a new round of cuts.
The first to make an announcement was the Industrial and Commercial Bank of China, which will lower the listed interest rate of deposits from tomorrow (December 22), involving multiple deposit varieties such as call deposits and lump sum deposits and withdrawals. The reduction ranges from 0.1% to 0.25%, with the adjusted interest rate at 1.45% for one year and 1.65% for two years.
The three-year and five-year fixed deposit interest rates have plummeted by 0.25%, which is really a lot. You must know that since September last year, the LPR of more than 5 years has only fallen by a total of 10 basis points.
Subsequently, China Construction Bank, Bank of China, Agricultural Bank of China, Postal Savings Bank, etc., as well as a number of joint-stock banks, also announced interest rate cuts.
Since September last year, deposit interest rates have been cut three times, and the three-year deposit interest rate has fallen by more than 0.5%. This means that the interest of 200,000 fixed deposit for three years has lost at least 4,000 yuan.
In contrast, the last LPR prime rate for 2023 remains unchanged: 3.45% for 1-year and 4.2% for more than 5 years. This is the fourth consecutive month of "standing still" since the asymmetric downward revision was achieved in August.
The simple and crude understanding is that the long-awaited mortgage interest rate has not been cut, but there are interest-bearing deposits in the bank, and the interest rate has been cut again after only 3 months.
So I saw that in just 2 hours, the interest rate cut on commercial bank deposits rushed to the first place on the hot search list, and the comment area was also full of complaints + complaints, which shows that the people are not only highly concerned about this matter, but also have a lot of complaints.
To be honest, only the deposit interest rate will be lowered and the mortgage interest rate will not be lowered, which I did not expect, because since October, I have predicted that the LPR will cut interest rates, the reason is very simple, since the second half of the year, the real estate has repeatedly been unable to save, the consumer side has continued to be weak, and the CPI has been negative for two consecutive months, coupled with the end of the US dollar interest rate hike cycle, the domestic interest rate reduction conditions have been extremely sufficient.
I'll just pick out this matter directly, the reduction of LPR in December and the reduction in January next year are completely different things, because many people's commercial loan contracts choose to recalculate the monthly payment amount according to the new interest rate on January 1 of the following year. As soon as the LPR announced that it would not move, the bank here announced a cut in the deposit interest rate, making it clear that it was to "lock in the income from the mortgage interest rate cut next year".
To put it simply, the money in the bank is rotten in the stomach, and it must not be cheap.
In a word, in the face of major issues of right and wrong, commercial banks are really only left with mercenary. Of course, the mainland's commercial banks are actually marionettes themselves, so I won't talk about this.
Bank deposits are cut again, what is the signal?
From the source, it is actually the net interest margin of banks that continues to be under pressure. The previous reduction in the interest rate of housing loans, as well as the cold property market in the past year and more than a year, dragged down the income of bank loans, a variety of reasons are superimposed, and this year, commercial banks have a hard time lending to earn interest margins.
In addition, banks also have to bear the heavy responsibility of lowering mortgage interest rates to stimulate the property market, so there are too many nominal concessions. But there is a saying that I have said many times before, the wool comes out of the pig, and in the end the dog pays the bill, to put it bluntly, it is the people's savings that really make the profit.
According to the data of the central bank, as of the end of September 2023, more than 22 trillion yuan of existing housing loan interest rates have been lowered, and the adjusted weighted average interest rate is 4.27%, an average reduction of 73 basis points, reducing borrowers' interest expenses by 160 billion to 170 billion yuan per year. However, in the past three deposit interest rate cuts, the cumulative release of deposit interest expenses has been as high as 500 billion, and it is obvious who subsidizes whom.
The high-sounding reason is nothing more than that the banking sector is the cornerstone of financial stability, and it is necessary not only to pay dividends to shareholders every year, but also to replenish capital in a timely manner in line with the growth of deposits, and that profits must be maintained at a reasonable level, otherwise financial security will be endangered.
Today, A-shares have rebounded for a long time, with the trading volume enlarged to 730 billion, the median of the two cities +0.59%, and the net purchase of foreign capital of 1.2 billion, which is actually affected by the bank's launch of a new round of interest rate cuts - bank stocks are the cornerstone of A-shares.
In fact, deposit rate cuts are not unfounded. On December 12, at a media conference held by the Bank of China Research Institute, senior executives bluntly pointed out that "the global economic growth may slow down further, and the operating pressure of the banking industry may become more and more obvious, and looking forward to 2024, the interest rate spread of China's banking industry will further decline, but the downward range will be smaller than this year." ”
Of course, at the macro level, commercial banks are actually cutting deposit interest rates in order to stimulate residents' consumption and drive out the deposits in the banks. The subtext is that if you don't consume, you are forced to consume. To put it bluntly, it is to take the money of people who love to save and do not buy houses to subsidize consumer investors. Looking back on the past, similar situations have happened many times, and there are lessons from the past in 08 and 15 years.
Although residents' enthusiasm for deposits this year has decreased compared with last year (17.84 trillion yuan), the total savings in the first 11 months are still as high as 14.7 trillion yuan. Therefore, the purpose of macroeconomic policies is to let this money go to the consumer market to buy, buy, buy, and then stimulate the economy through internal circulation.
In December, only the deposit rate was cut but not the mortgage rate, and the hammer believes that there is another reason, everything is preparing for the "water release" in 2024.
This sentence has two meanings: First, the economic growth target of 5% for the whole year is already in place, and there is no need for excessive stimulus. That is, to weigh the pros and cons in a timely manner to avoid greater negative impact caused by temporary compensation.
This is not unfounded.
If we look at the state balance book and consumption and investment in November, we will have the answer. In November, the general public budget revenue was 4.3% year-on-year, compared with 2.6% in the previous month, rebounding for the third consecutive month. Structurally, non-tax revenue was 9.8% year-on-year. Of course, looking at the sub-contribution, it is mainly driven by value-added tax, enterprise income tax, and vehicle purchase tax. Judging from the growth rate of real estate-related tax revenues, the activity of land and housing transactions in November was still not high.
In November, the general public budget expenditure was 8.6% year-on-year, compared with 11.9% in the previous month; the revenue and expenditure of government funds in November were "accumulated and developed", with the expenditure being 1.2% year-on-year and the previous value of -18.4%, mainly due to the recovery of the land market, and the expenditure was 1.6% year-on-year, and the previous value was 17.7%.
To sum up, the prosperity of the automobile, infrastructure, and land markets all rebounded in the fourth quarter, mainly due to the previous issuance of an additional 1 trillion yuan of special treasury bonds, and the land market returned to the era of "the highest price wins".
The second is to make room for further cuts in loan interest rates next year.
The primary goal is to achieve a soft landing for real estate and maintain the overall financial situation of the local government. Therefore, the policy is likely to guide the residential mortgage interest rate to decline significantly by lowering the lower limit of the mortgage interest rate.
The reason remains the same: the real estate market does not rebound, the purchasing power of society does not recover, or even accelerates the deterioration, which will be a burden that we cannot bear.
As for how many times the RRR and interest rates will be cut next year, this cannot be predicted, and everything depends on the recovery of consumption and real estate. This is why the top management has repeatedly emphasized that "monetary supply should match the economic growth rate".
If you want me to say, the core issue now is not whether water will be released in 2024, but whether the funds can be transmitted downward and flow into the pockets of the people. That is, will the cheap money from the banks enter the residential sector? Instead of the money falling into the pockets of a small number of people, as is the case this year, the residential sector enjoys the reputation of "surging savings" and in fact the pockets are clanging, which is why there will be a consumption contraction.
At the same time, the stock market and the property market, which are the most capable of increasing the wealth of the residential sector, are both on fire: one relies on pulling heavy stocks to maintain stability every day, and internal transactions are not visible, and the other is seriously declining, and liquidity is almost exhausted.
In fact, there is enough water released this year, as of the end of November, the total amount of M2 was 291.2 trillion, approaching the 300 trillion mark, and the year-on-year growth rate has maintained double digits for 20 consecutive months, which is quite amazing.
Monetary policy is accommodative, why is the liquidity of the household sector still insufficient?
In a word, the domestic circulation is not smooth.
On the one hand, most of the water released went to the local departments to pay off debts. The housing market and the prefecture market, which are highly dependent on local finances, have continued to decline, which is miserable, and local expenses are getting bigger and bigger, and there is a serious shortage of income to make ends meet, and the salaries of personnel of many local institutions and units cannot be paid. As a result, the central government has no choice but to step up and make money for localization. I won't go into detail about this, let's look at this picture.
On the other hand, affected by the global economic downturn, external demand is sluggish, export growth has declined significantly, and domestic consumption is tepid, and the enthusiasm of enterprises to borrow and invest to expand production has decreased.
There is a phenomenon that everyone should have discovered, in the past, it was enterprises chasing banks for loans, and now banks are asking for corporate loans. Behind the reversal is a slight decline in business confidence. Enterprises do not do production, focus on reducing costs and increasing efficiency, which is a typical way to cope with the cold winter.
Why are companies reluctant to take out loans? This is also a question worth pondering.
Hammer thinks it has a lot to do with the fact that the Invisible Hand has managed too much in the past few years. For example, the setting of red lines everywhere, the sudden change of orders, and the unreasonable delay in arrears have seriously weakened the willingness of enterprises to lend. Fortunately, the macro level has been aware of this problem, and the "20 Articles of the Private Economy" launched not long ago can be regarded as "the right medicine".
Therefore, from the results, it is not the key to release water in 2024, but to dredge the blockages.
If this situation is not improved, the public's psychology may not be sunny next year, and most of the long-term debt behaviors such as buying a house are unwilling to do it, and there are many cases of investment without return, and the negative sentiment is unlikely to dissipate in the short term.
As a result, there are only two situations: one is to know that the deposit is slowly consuming the principal in another form, and the interest income is meager, but what you want is that sense of security; the other is to continue to take the initiative to reduce your debts and repay the bank loan in advance with a little extra money.
It's not that I'm guiding everyone in this direction, it's that the reality is too helpless, and smart people are voting with their feet.