Author丨Zhang Xin
Editor丨Fang Haiping
The bank's large certificates of deposit are gone? What's going on?
"The large-denomination certificate of deposit product has not been removed from the shelves, but the product is selling well, such as the one-year large-denomination certificate of deposit issued in early April, which has been fully quoted. ”
Recently, there is news in the market that the Bank of Communications and the Postal Savings Bank have also "removed the shelves" of long-term large-amount certificates of deposit, in this regard, on April 25, the 21st Century Business Herald reporter called a branch of the Bank of Communications in Beijing, and a salesman explained.
Screenshot of the Bank of Communications App
At present, the pressure on banks' interest margins is increasing, and the trend of fixed-term and long-term deposits is still relatively obvious, so banks continue to optimize the debt structure and reduce high-cost deposits, and long-term large-amount certificates of deposit are also within the scope of reduction. In order to alleviate the pressure on the debt side, senior executives of many large state-owned banks said at the 2023 annual results conference that they would carry out certain control over medium and long-term deposits.
Regarding the recently hotly discussed "disappearing long-term" large-amount certificates of deposit, netizens have commented:
The five-year period "disappeared", and all the large-value certificates of deposit of some banks were sold out!
Many large banks are hard to find medium and long-term large-denomination certificates of deposit!
"Now banks don't have any certificates of deposit that are more than five years old, and they can't buy them at all. On April 24, Ms. Wang told the 21st Century Business Herald reporter that it is difficult to find medium and long-term large-amount certificates of deposit in banks, and their interest rates are also very advantageous compared with ordinary time deposit interest rates, so she began to shift her investment focus from large-amount certificates of deposit to increase whole life insurance, annuity insurance and other insurance products.
The 21st Century Business Herald reporter logged on to the App and official websites of a number of large banks, searched for the keyword "large-value certificates of deposit", and found that the large-amount certificates of deposit for more than five years have disappeared, and some banks do not even have large-amount certificates of deposit for more than two years, and the large-amount certificates of deposit of other banks have all been sold out. There are only a small number of "negotiable" CDs, which have interest rates ranging from 1.49 per cent to 2.6 per cent.
For example, China Merchants Bank, known as the "king of retail", no longer has 3-year or 5-year large-value certificate of deposit products on its app. Currently, only 1-month, 3-month, 6-month, 1-year and 2-year certificates of deposit are on sale, with interest rates ranging from 1.65% to 2.15%. From the perspective of the interest rate of the transfer product, the remaining term ranges from 2 years and 4 months to 1 year and 4 months, and the annualized interest rate of the large certificate of deposit with a limit of 200,000 yuan ranges from 2.20% to 2.18%, but there is no transfer of 5-year large certificate of deposit.
The financial manager of China Merchants Bank previously told the 21st Century Business Herald reporter that the three-year large-amount certificate of deposit had been stopped as early as last year, and the bank is currently facing the problem of excess savings and loan delivery, making the decline in interest rates an inevitable trend.
(Large-value certificates of deposit in China Merchants Bank App)
The apps of Minsheng Bank, Industrial and Commercial Bank of China, Bank of China, and China Construction Bank all show that there are no five-year large-value certificates of deposit. At present, Minsheng Bank only has 6-month, 1-year, 2-year, and 3-year certificates of deposit, with interest rates ranging from 1.5% to 2.6%; Industrial and Commercial Bank of China only has 1-month, 3-month, 6-month, 1-year, 2-year, and 3-year certificates of deposit, with interest rates ranging from 1.5% to 2.35%; Bank of China only has 1-month, 3-month, 6-month, 1-year, 2-year, and 3-year certificates of deposit, with interest rates ranging from 1.49% to 2.35%; and China Construction Bank only has 1-month, 6-month, 1-year, 2-year, 3-year certificates of deposit, with interest rates ranging from 1.49% to 2.35%.
According to the large-denomination certificates of deposit on the App of the Bank of Beijing, there are no large-denomination certificates of deposit for more than two years, only 1 month, 3 months, 6 months, and 1 year, with interest rates ranging from 1.8% to 2.1%, and the official website of China CITIC Bank shows that there are no large-denomination certificates of deposit for more than five years, and there are only large-denomination certificates of deposit for 3 months, 6 months, 1 year, 2 years, and 3 years, with interest rates ranging from 1.7% to 2.6% The SPD Bank App has sold out all the large-denomination certificates of deposit, only the large-denomination certificates of deposit are in transfer, and its latest large-denomination certificates of deposit products that have been sold out are 3 months, 6 months, 1 year, and 3 years, with interest rates ranging from 1.7% to 2.6%.
Screenshot of the large-value certificate of deposit page of the Shanghai Pudong Development Bank App
It is worth noting that while the large banks are "not short of money" and shrinking their large-denomination certificates of deposit, some small and medium-sized banks have already experienced an "inversion" of interest rates, although they rely on large-denomination certificates of deposit to collect deposits. For example, Wuxi Xishang Bank sells large-denomination certificates of deposit with a tenor of 1 year, 3 years and 5 years, with interest rates of 2.2%, 3.0% and 2.9% respectively.
In the past, the storage weapon was left out in the cold
Why are large certificates of deposit, which are regarded as a powerful tool for savings by banks, left out in the cold?
Liu Yinping, an analyst at the Rong 360 Digital Technology Research Institute, told the 21st Century Business Herald reporter that the current pressure on bank interest margins is increasing, and the trend of regular and long-term deposits is still relatively obvious. In this context, banks continue to optimize their liability structure, reduce high-cost deposits, and reduce long-term large-denomination certificates of deposit.
Zhang Yihan, an analyst at the financial business department of Oriental Jincheng, also said in an interview with the 21st Century Business Herald reporter that the current decrease in the number of long-term large-amount certificates of deposit issued by state-owned banks and joint-stock banks is related to the current interest rate trend. Banks are reluctant to pay higher costs for long-term deposits due to falling interest rates.
Click to review: domestic deposit interest rates have been declining, and savings e-treasury bonds have also been →
In a relatively loose market environment, the interest rate on large-denomination certificates of deposit is relatively high, and in view of the pressure of narrowing interest rate spreads, banks have reduced the issuance of long-term large-denomination certificates of deposit in order to optimize the deposit structure and reduce the cost of debt.
On the other hand, in the past two years, residents' enthusiasm for deposits has been relatively high, and the scale of bank deposits has grown rapidly, but it is difficult to lend loans, which has further affected the enthusiasm of banks in absorbing long-term deposits.
From the perspective of interest margins, data from the State Administration of Financial Supervision and Administration show that the net interest margin of the banking industry fell by 0.3 percentage points in the ten years from 2010 to 2019, and by 0.51 percentage points in the four years from 2020 to 2023, a decline of 1.7 times that of the previous 10 years. As of the end of 2023, the net interest margin of commercial banks fell to 1.69%, falling below 1.7% for the first time, and breaking through the threshold of 1.8% for the self-regulatory mechanism in the Implementation Measures for Qualified Prudential Assessment (2023 Revision).
In addition to the narrowing of net interest margin, residents' willingness to save continued to strengthen. According to data released by the Central Bank's Survey and Statistics Department, the proportion of urban residents who preferred "more savings" in the first and fourth quarters of 2023 was 58%, 58%, 62.2% and 61%, respectively, higher than the average of 53% from 2020 to 2022.
At present, the trend of fixed-term deposits is also very obvious. Liu Jianjun, chief risk officer of Bank of Communications, said at the 2023 results meeting that although the deposit interest rate on the liability side has been reduced, the current industry-wide problem is that the trend of deposit regularization has not fundamentally changed. Therefore, the change in deposit structure makes it difficult for the decline in the pricing of various types of deposits to bring about a decline in the overall cost of liabilities. Zhang Yi, Deputy Governor of Bank of China, pointed out at the results conference that the current trend of fixed-term and long-term deposits is more obvious, the proportion of long-term time deposit products has increased, and market competition has also intensified the downward momentum of costs.
A number of large state-owned banks have expressed their stance intensively!
In order to alleviate the pressure on the debt side, senior executives of many large state-owned banks said at the 2023 annual results conference that they would carry out certain control over medium and long-term deposits.
Sheng Liurong, chief financial officer of CCB, said that since the second quarter of last year, CCB has guided its branches to absorb more settlement funds through assessment adjustments and internal transfer price adjustments, so as to better control deposits with higher interest payment rates for more than three years.
"This year, we have stepped up the assessment of first-level branches, strengthened the control of high-interest deposits with a maturity of more than three years and interbank liabilities with relatively high costs, and reduced the discount scale with relatively low returns on the asset side. At the same time, we will continue to build an enterprise-level capital cycle and capture low-cost settlement funds through digital and ecological methods. Sheng Liu Rong said.
Liu Jianjun, President of the Postal Savings Bank, said at the results conference that by strengthening the comprehensive assessment of wealth management and AUM, customers can retain more demand deposits, try to increase the proportion of demand deposits, and carry out certain control over medium and long-term deposits.
Zhang Yihan, an analyst at the financial business department of Oriental Jincheng, said that on the whole, national banks such as state-owned banks and joint-stock banks are different from small and medium-sized banks such as urban commercial banks and rural commercial banks in some regions in the issuance of large-amount certificates of deposit, but considering the overall trend of the downward trend of banks' capital costs, it is expected that the issuance of large-amount certificates of deposit may gradually slow down in the future.
SFC
This issue is edited by Jiang Peipei
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