Following the collective reduction of deposit interest rates by six major state-owned banks and China Merchants Bank last Friday, on December 25, 11 joint-stock banks, including China CITIC Bank, Ping An Bank, Industrial Bank, China Everbright Bank, Minsheng Bank, Guangfa Bank, Shanghai Pudong Development Bank, Zheshang Bank, Hengfeng Bank, Huaxia Bank and Bohai Bank, also lowered the listed interest rates on RMB deposits. So far, the third wave of deposit interest rate cuts this year has "swept through" the six major state-owned banks and 12 joint-stock banks.
The interest rates of the 11 joint-stock banks were lowered by the same extent as the large state-owned banks, and the interest rates were different
According to the latest listed interest rates, the listed interest rates of three-month, six-month and one-year fixed deposits of these 11 joint-stock banks have been generally lowered by 10 basis points, the listed interest rates of two-year fixed deposits have been generally reduced by 20 basis points, and the listed interest rates of three-year and five-year fixed deposits have been generally reduced by 25 basis points, which is the same as that of large state-owned banks.
Taking Ping An Bank as an example, its adjusted three-month, six-month, one-year, two-year, three-year and five-year fixed deposit interest rates were 1.20%, 1.45%, 1.65%, 1.90%, 2.00% and 2.05% respectively, which were 10 basis points, 10 basis points, 10 basis points, 10 basis points, 20 basis points, 25 basis points and 25 basis points respectively.
Since the interest rate of each bank is not exactly the same, the listed interest rate after this cut is also different. After the adjustment, the 3-month, half-year, 1-year, 3-year and 5-year listed interest rates of joint-stock banks such as China Everbright Bank and China CITIC Bank are the same as those of Ping An Bank, and the listed interest rates of 2-year fixed deposits are different. The listed interest rate of China Everbright Bank's 2-year fixed deposit is 1.8%, and that of China CITIC Bank is 1.7%.
On the whole, the listed interest rates of the 11 joint-stock banks on one-year lump sum deposits and withdrawals were all lowered to 1.65 percent; the interest rates on the two-year fixed deposits and withdrawals of the four joint-stock banks were lowered to 1.90 percent, and those of the other joint-stock banks were all 1.70 percent or 1.80 percent; after the adjustment, the listed interest rates of the three-year fixed deposits of many banks were 1.95 percent or 2.00 percent, and those of Bohai and Hengfeng were 2.30 percent; and the interest rates on five-year fixed deposits were generally reduced to 2.05 percent. Hengfeng is 2.30%.
The optimal interest rates on deposits of various banks have also been lowered at the same time
In fact, the actual deposit interest rate implemented by banks is generally higher than the listed interest rate. Generally speaking, the higher the deposit amount, the higher the actual preferential interest rate. A reporter from Beijing Youth Daily noticed that after today's interest rate cut, the maximum deposit interest rate of these joint-stock banks has also been lowered in tandem with the listed interest rate.
A reporter from Beijing Youth Daily noticed that on December 24, the interest rate of Ping An Bank's five-year fixed deposit of 5,000 yuan was 2.70%, and that of 3,000 yuan was 2.65%, and the interest rate of three-year fixed deposit was 2.85% for 500,000 yuan, 2.80% for 100,000 yuan, and 2.70% for 5,000 yuan, and 2.35% for 2-year and 3,000 yuan, and 2.05% for one-year deposit. On December 25, the interest rate of Ping An deposit was lowered across the board, with the highest interest rate for 5 years reduced to 2.65% (starting from 10,000 yuan), the highest interest rate for 3 years being 2.60% (starting at 10,000 yuan), 2 years being 2.15% (starting at 10,000 yuan), and 1 year being 1.95% (starting from 10,000 yuan), which was 5-25 basis points lower than before. After the reduction, the optimal interest rate of Ping An Bank's fixed deposit is 25-60 basis points higher than the listed interest rate.
The interest rate of the three-year fixed deposit with a minimum deposit of 50,000 yuan was 2.75%, 2.35% for the two-year and 2.05% for the one-year deposit before the reduction, and 2.60%, 2.15% and 1.95% respectively after the reduction, which were reduced by 15 basis points, 20 basis points and 10 basis points respectively, which was also significantly higher than the listed interest rate.
Some banks have also made adjustments to large certificates of deposit. According to reports, starting from December 25, the Industrial Bank lowered the interest rate on personal notice deposits and large-amount certificates of deposit, among which the interest rate on one-year large-amount certificates of deposit was lowered from 2.1 percent to a maximum of 2 percent, the three-year interest rate was reduced from 2.9 percent to 2.6 percent, and the five-year interest rate was reduced from 2.95 percent to 2.65 percent.
The reduction of deposit interest rates will help ease the pressure on banks' net interest margins and enhance the momentum of residents' investment and consumption
It is understood that this round of interest rate cuts is the third round of deposit interest rate cuts launched by mainland commercial banks after June and September this year. As a result of these three adjustments, the one-year, two-year, three-year, and five-year fixed deposit interest rates of major state-owned banks have been reduced by 20 basis points, 50 basis points, 65 basis points, and 65 basis points respectively, and the latest listed interest rates have all been lower than the yield on treasury bonds. Judging from the rhythm of previous deposit interest rate adjustments, it is mainly a demonstration for large banks, followed by joint-stock banks and small and medium-sized banks, but there may be differences in the time rhythm and adjustment range.
In the view of people in the industry, it is necessary to reduce the interest rate on commercial bank deposits, which is conducive to reducing the cost of liabilities of commercial banks. According to data from the State Administration of Financial Supervision and Administration, in the third quarter of this year, the net interest margin of commercial banks was 1.73%, a slight decrease of 0.01% from the first and second quarters of this year, which was at a historical low.
Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, believes that the main reason for the reduction of deposit interest rates is that some banks have made full use of the market-oriented adjustment mechanism of deposit interest rates to alleviate the pressure on net interest margins and expand space for banks to further benefit the real economy. The reduction in deposit rates will help alleviate the pressure on banks' net interest margins, promote banks to further benefit the real economy, and help consumption and demand rebound. Combined with the previous experience of the reduction, it is expected that large, medium and small banks will follow up and reduce the deposit interest rate in order to ensure a stable and orderly deposit market.
Some industry insiders pointed out that the adjustment of the deposit interest rate rarely occurred at the end of the year, the impact of the "good start" stage, coupled with the fact that the LPR was not lowered in December, from the perspective of anchoring the LPR of existing housing loans, it will ease the pressure on interest rate spreads for banks from both ends of assets and liabilities.
According to the CICC research report, it is expected that this round of adjustment will drive the weighted average interest rate of time deposits down by about 15BP, which is higher than the previous rounds of interest rate cuts. Based on the calculation of about 150 trillion yuan of fixed deposits, the 15 basis points reduction in interest rates will save banks 225 billion yuan in interest expenses every year, which is comparable to the impact of the reduction in the interest rate of existing mortgage loans.
Lin Yingqi predicts that the positive contribution of fixed deposits to bank interest margins will be about 6 basis points, which can boost revenue by about 3% and net profit by 6% (annualized), which will be gradually released in the next 1~2 years in deposit repricing. Among them, the impact on interest margins in 2024 may be 3 basis points, with revenue impacting 1.5% and net profit impacting 3%.
A recent research report by CITIC Securities pointed out that on the one hand, the reduction of deposit pricing will help stabilize the cost of bank liabilities and interest margins, effectively cope with the impact of the adjustment of existing mortgage interest rates and the impact of debt on interest margins, create favorable conditions for banks to make profits to the real economy, and promote the further reduction of financing costs in the real economy;
There is room for further reductions in deposit rates
Many people in the industry believe that although bank deposit interest rates have been adjusted many times since last year, the pressure on bank net interest margins still exists, and there is room for further reduction in deposit interest rates in the future.
Dong Ximiao, chief researcher of Zhaolian, said that in the long run, in the economic downturn, the price of various assets will decline, investment income will decline, and the deposit interest rate will decline. The Central Economic Work Conference demanded that "promote the steady and moderate decline of comprehensive social financing costs". At present, the People's Bank of China has established a market-oriented adjustment mechanism for deposit interest rates. In this context, banks will still be likely to reduce costs on the capital side in the future, and it is more likely that the deposit rate will continue to fall.
Dong Ximiao also pointed out that considering the current insufficient effective financing needs of enterprises and residents, weak confidence and expectations, and low risk appetite, in order to fundamentally boost the willingness and ability of enterprises and residents to invest and consume, it is also necessary to make more active efforts in monetary and fiscal policies, especially the central bank should continue to reduce the deposit reserve ratio and policy interest rate, and provide banks with more medium and long-term low-cost funds.
Text/Beijing Youth Daily reporter Cheng Jie
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