Original title: Small banks "strong interest rates" Big banks "manual interest supplements", what is the obsession of banks to collect deposits under the pressure of cost reduction
On the one hand, the scale of deposits, on the other hand, to reduce the cost of funds, different types of banks are facing this seemingly contradictory task, how to grasp the scale to test the wisdom of each one.
"We also don't want to raise the cost of capital, but we don't have a policy advantage in absorbing low-cost corporate deposits; if the interest rate on personal deposits is not higher, how can customers choose us?" Xia Xinyi (pseudonym), an insider of a regional bank, bluntly said to a reporter from the China Securities Journal that attracting customers and saving at higher interest rates is a choice that small banks have no choice but to make.
Small banks are in a weak position in terms of customer base and brand effect, and the pricing advantage is an important starting point for them to expand new customers and maintain old customers. What is the motivation to pursue the scale of deposits at the expense of a higher cost of funds? The competition for market share and customer resources, and the sufficient sources of funds needed to support the scale of lending may be the answer.
It's not just the small lines that can't abandon the scale complex and the speed complex. A few days ago, the reporter learned from the investigation that some large banks paid higher interest to corporate customers through manual interest compensation to absorb large deposits. At present, banks are accelerating the rectification of the above practices to alleviate the downward pressure on net interest margins.
It is difficult for small banks to give up high-interest deposits to compete for customers
The minimum deposit of 200,000 yuan, the 3-year interest rate is 3.0%, and the issuance is omni-channel. When he swiped the marketing advertisement of a regional bank's WeChat public account, Zhang Li, a resident of Beijing, couldn't help but be moved. She told reporters that her large-amount certificate of deposit has just expired, and it is now difficult to find a large-amount certificate of deposit product with an interest rate of more than 3.0% on the market, and she is considering flying to other places to deposit this money.
"Where are there more than 3.0% of large certificates of deposit? On social platforms, many netizens, like Zhang Li, are looking for bank outlets with higher deposit rates. In the comment area, some netizens actively shared: "Come to Guangdong, Guangdong Huaxing Bank's 5-year large-amount certificate of deposit interest rate for new customers is 3.20%", "Go to Zhejiang, Zhejiang Tailong Bank's 3-year large-amount certificate of deposit interest rate is 3.05%"......
For a long time, "high-interest savings" has been a frequent topic for regional banks. Even at a time when commercial banks have undergone several interest rate cuts in response to the continuous narrowing of net interest margins, there are still regional banks that use large-denomination certificate of deposit products with relatively strong deposit rates as a "sharp weapon" to attract savings and customers.
For example, at the beginning of April, Shanxi Wenxi Rural Commercial Bank launched a three-year large-denomination certificate of deposit with an interest rate of 2.95%. Jiangsu Wuxi Xishang Bank launched a large-denomination certificate of deposit, with a three-year interest rate of 3.0% and a five-year interest rate of 2.9%. Guangxi Tengxian Rural Credit Cooperative has launched a large-amount certificate of deposit with a three-year interest rate of 3.25%.
Jiangsu Taicang Rural Commercial Bank opened the appointment channel of "New Customer Exclusive Phase II - Personal Large Certificates of Deposit". The minimum purchase amount of the product is 200,000 yuan, the term is two years, and the annualized interest rate is 2.7%. The deadline for reservations is April 30, and the subscription period starts on May 7.
"Although the overall deposit scale is growing, it is still difficult for us small banks to collect savings. Compared with the big banks, we definitely don't have a brand advantage. If the deposit rate is not competitive, it will be difficult for customers to choose us.
For banks, if they want to do large-scale, they must first absorb enough deposits before they can lend out. We are very eager for our customers' accounts to be opened in our bank, so that we can develop more business in the future. Xia Xinyi said.
Another regional banker told reporters: "From the perspective of the proportion of deposits, corporate deposits must account for the majority. The large amount and low interest rate are the 'sweet spots' of the interbank industry. However, some central state-owned enterprises have regulations that unit funds can often only be deposited in large banks, and some regional banks also have local resource advantages. We have no choice but to 'roll' the interest rate. ”
Regarding the overall growth of the scale of deposits, but small and medium-sized banks are still difficult to collect deposits, Ren Tao, a distinguished researcher at the National Finance and Development Laboratory, told reporters: "Some small and medium-sized banks can provide customers with limited types of deposits, and lack of effective ways to maintain existing customers and expand customers. Some small and medium-sized banks have no better means of maintaining relationships with their customers than deposit pricing. ”
"Different banks have different rhythms and magnitudes of adjusting deposit interest rates due to different factors such as market competition, customer positioning, and liability structure. Small and medium-sized banks, especially rural commercial banks, have relatively low interest margins due to their relatively low customer base, and the downward pressure on interest margins has not yet fully emerged. Dong Ximiao, chief researcher of Zhaolian, explained to reporters some of the reasons why some small and medium-sized banks "bucked the trend and attracted savings".
The big bank manually makes up the interest and grabs the big one
"At present, the total amount of deposits is quite large, but for a single institution, there is still the problem of high and low market share. Under the scale and speed complex, some banks still value the growth speed, scale and proportion of the deposit business, hoping to compete for more market share and customer resources. Dong Ximiao said.
Corporate business is an important foundation for the development and profitability of commercial banks. At present, many banks are improving their strategic position in corporate business. Among them, the market competition for corporate deposits is becoming more and more intense. According to the reporter's research, some large banks previously paid higher interest to corporate customers through manual interest supplementation to absorb large deposits.
"Manual interest payment was originally a correction link of the bank's business operation errors, and under the premise that the system could not automatically complete the interest settlement, a special supplementary interest calculation transaction was used to manually calculate the interest. However, in order to complete the task of collecting deposits, some grassroots bank staff use manual interest payment as a way of interest rate subsidy, so as to circumvent the internal pricing authorization. A banker said.
In Dong Ximiao's view, the pressure of top-down deposit assessment is often greater. The pressure of narrowing interest rate spreads is usually difficult to effectively transmit to bank branches and grassroots employees, which leads to various forms of high-interest savings. A few days ago, the self-discipline mechanism for market interest rate pricing issued the "Initiative on Prohibiting the Cultivation of Savings through Manual Interest Replenishment and High Interest Rates to Maintain the Order of Competition in the Deposit Market." In this regard, a number of bankers told reporters that their branches are being rectified.
The Initiative makes it clear that it is strictly forbidden to break through the authorization requirements of deposit interest rates or the upper limit of self-discipline in disguised form by means of prior commitments and manual interest payments at maturity. With immediate effect, banks are not allowed to promise or pay top-up interest to customers in any form that exceeds the authorized upper limit of the deposit interest rate. Any interest payment promise made in violation of the previous regulations shall not be paid on the interest payment date. Banks should immediately carry out self-inspections and complete rectification by the end of April 2024.
In the view of Liu Chengxiang, chief analyst of Kaiyuan Securities Bank, the rectification pressure of state-owned banks and joint-stock banks may be greater. The upper limit of the interest rate of the state-owned bank agreement and call deposit is lower than that of the rest of the banks, and the deposit interest rate is less competitive, or it is more dependent on "retaining customers" by way of interest supplement.
"Most of the enterprises that can obtain the bank's 'manual interest payment' are central state-owned enterprises and industry leading enterprises, and they are more strict about the screening of banks, and usually only state-owned banks and joint-stock banks can enter their white lists. We estimate that the scale of deposits of these two types of banks involving manual interest payment may be larger, and they will become the key targets of the new regulations. Liu Chengxiang said that the new regulations mean that the deposit supervision will be more refined, and various high-interest deposit behaviors will be gradually restricted, which will help banks effectively reduce deposit costs and ease the downward pressure on net interest margins.
Proactively drive down the cost of debt
In addition to tightening the constraints on high-interest deposits, banks are passively reducing deposit costs, and some banks are also actively adjusting their liability structure, tightening the issuance scale of high-interest debt products, including large-value certificates of deposit, and compressing capital costs to cope with the pressure of narrowing net interest margins.
"At present, our bank has limited supply of large-denomination certificates of deposit with three-year and five-year tenors, and the quota is small. The purchase of large-value certificates of deposit through mobile banking or online banking is generally for a period of two years or less. A few days ago, the official customer service of China Merchants Bank answered reporters.
On April 18, the reporter inquired about the APP of a number of state-owned banks and joint-stock banks and found that the newly issued 5-year large-value certificate of deposit products are very rare. Apps such as China Merchants Bank and China CITIC Bank do not display large-denomination certificates of deposit with a maturity of two years or more.
In addition to tightening the quota, from the perspective of interest rates, compared with time deposit products, the interest rate advantage of some banks' large-denomination certificate of deposit products is no longer there. Taking China Construction Bank as an example, the bank's APP shows that the minimum deposit of large-amount certificates of deposit is 200,000 yuan, the maximum term is 3 years, and the maximum annual interest rate is 2.35%, which is consistent with the maximum annual interest rate of the bank's fixed deposits.
According to the APP of Industrial Bank, the bank's large-amount certificates of deposit are deposited at a minimum of 200,000 yuan, and the maximum interest rate for 3 years is 2.60%. The 3-year interest rate of the bank's fixed deposits is also 2.60%. The difference is that the minimum deposit for "ceremonial deposit certificate" is 50 yuan, and the minimum deposit for "exclusive deposit" is 5,000 yuan.
A number of bank executives said at the 2023 annual results briefing that in 2024, they will continue to promote the reduction of debt costs and increase the pressure on high-cost deposits.
For example, Zhang Yi, deputy governor of the Bank of China, said, "Although the deposit rate has been lowered three times in 2023, the trend of fixed-term and long-term deposits is still relatively obvious." At the same time, market competition has also exacerbated the downward momentum of costs. This year, we will reduce the pressure on high-cost deposits, including agreement deposits, structured deposits, and large-amount certificates of deposit with a maturity of more than three years, and we have set some reasonable growth targets, and we will appropriately control the proportion of these deposits. ”
Banks of all kinds are looking for a path to stable development
"Recently, some banks have reduced and adjusted the quota of large certificates of deposit to better manage the cost of debt and net interest margin. However, it is not excluded that some regional small and medium-sized banks will increase customer acquisition and deposit absorption by moderately increasing large-value certificate of deposit products. Zhou Maohua, an analyst at the financial market department of Everbright Bank, told reporters.
According to Lou Feipeng, a researcher at the Postal Savings Bank, the reason why some regional banks have newly issued large-value certificates of deposit and have relatively high interest rates is that small and medium-sized banks lack advantages in absorbing deposits and hope to pay relatively high interest rates to absorb deposits. Since the beginning of this year, while deposits have maintained a relatively high growth rate, the scale of new deposits and the year-on-year growth rate are not as fast as last year.
According to data from the People's Bank of China, as of the end of March, the balance of RMB deposits was 295.51 trillion yuan, a year-on-year increase of 7.9%. "Since March last year, the growth rate of deposits has entered a downward channel. In terms of sub-sectors, the two major sectors of residents and enterprises both achieved a small year-on-year increase in the first quarter. Cinda Securities' macro team analyzed.
Ren Tao said that national banks have the advantages of network coverage and customer base, and there is no need to excessively collect savings through "price increases", and they can remain rational in terms of savings in accordance with the strategy of following liabilities. By improving the service level, improving the internal assessment mechanism, enriching the optional configuration varieties, and optimizing the market-oriented debt and deposit structure, the "six natures" goals such as the stability of the source of liabilities, the diversity of the debt structure, the rationality of the matching of liabilities and assets, the initiative of debt acquisition, the appropriateness of debt costs and the authenticity of debt items are realized.
In Ren Tao's view, compared with national banks, the advantages of regional banks are mainly reflected in pricing, but they need to balance the cost of debt and the two dimensions of savings, so as to avoid falling into a vicious circle of "high-interest savings, narrowing interest margins, and increasing liquidity pressure". Specifically, we can consider taking the road of differentiated competition by increasing the contribution of market-oriented liabilities, strengthening cooperation with high-quality financial institutions to enrich the allocable varieties, moderately slowing down the pace of scale expansion to alleviate the pressure of collecting reserves, providing more high-quality services to maintain the relationship with existing customers, and strengthening the cooperation ties with local strategic customers.
