The bank’s debt cost reduction is expected to be gradually implemented, or open the way for increasing the support of the real economy.
The first financial reporter learned from a number of banks that on April 25, there will be an intensive decline in bank deposit interest rates. The adjustment subjects include both large state-owned banks and joint-stock banks. The adjustment scope is mostly for medium and long-term deposits and large certificates of deposit, and the reduction range is mostly 5bp ~ 15bp (basis points). According to the latest list of deposit products provided by the staff of large state-owned banks, the floating upper limit of interest rate will be reduced by 10bp for 2-year fixed deposit and 3-year and 5-year certificates of deposit from the same day, and the interest rate of the most popular 3-year products in certificates of deposit will be reduced from 3.35% to 3.25%.
In fact, the reporter learned earlier that with the tightening of supervision, the decline of interest rates and the increase of interest margin pressure, most banks have actively or passively reduced the amount of certificates of deposit. Coupled with the “breaking net tide” of financial products this year, certificates of deposit have become more in demand and “difficult to grab”. At present, among the joint-stock banks, the interest rate of three-year certificates of deposit has been reduced to 2.9%.
Zeng Gang, director of Shanghai finance and development laboratory, believes that the fundamental purpose of reducing the cost of bank liabilities through marketization rather than the central bank’s reduction of the benchmark interest rate is to improve the ability of the real economy to make profits Dai Zhifeng, director of Zhongtai Securities Co.Ltd(600918) Research Institute, also pointed out that by reducing the deposit cost of small and medium-sized banks, the asset side can lower the pricing of small and medium-sized micro enterprises, but the effect remains to be seen. For banks, if the industry generally reduces the deposit interest rate, it can boost the net interest margin and then increase the net profit, and the impact on the deposit business volume is limited.
4 month 25 Daily window period
“Ordinary deposits will be lowered from the 25th, the three-year fixed deposit interest rate will be reduced from 3.5% to 3.45%, and the certificate of deposit will be reduced from 3.55% to 3.5%. It is tentatively implemented in this way.” A customer manager of a national joint-stock bank in Beijing said that in addition to the 3-year deposit products, the interest rates of 1-year and 2-year ordinary deposits will also be generally lowered.
In addition, the account manager of a large state-owned bank in Beijing showed the customer a list of the latest products, which clearly lowered the upper limit of the floating range of interest rates of some deposit products on the 25th, including the reduction of 10bp to 2.50% (central bank benchmark 2.1% + 40bp) for fixed deposits of more than 10000 yuan for two years, 10bp to 2.60% (central bank benchmark 2.1% + 50bp) for two-year deposits of 200000 yuan and 3.25% (central bank benchmark 2.75% + 50bp) for three-year deposits of 500000 yuan.
However, some local account managers in China Merchants Bank Co.Ltd(600036) Beijing said that the interest rate of some deposit products of the bank had been reduced. From China Merchants Bank Co.Ltd(600036) app, it can be seen that the interest rate of the bank’s three-year (200000 yuan deposit) large deposit certificate has dropped to 2.90%, which is the same as that of ordinary three-year (1000 yuan deposit) fixed deposit.
Since the central bank launched the reform of the quotation mechanism for deposit interest rates in June 2021, the yield of certificates of deposit has been greatly affected. In that month, the 3-month to 1-year interest rate has been significantly increased, and the 2-year to 5-year interest rate has been significantly reduced. The maximum interest rate of 3-year certificates of deposit with an average interest rate of more than 4% was limited to 3.55%. However, the short-term and medium-term interest rates rose slightly as a whole. Most banks set long-term limit products according to the new interest rate ceiling, especially the interest rates of small and medium-sized banks with great pressure to attract deposits are generally high.
However, in the past two years, with the changes in the interest rate environment, the impact of the epidemic and the pressure of reducing fees and interests, banks have generally changed their strategies to collect deposits, and it has become a trend to optimize the deposit structure and reduce the proportion of high-cost deposits. Among them, the scale of structured deposits has shrunk significantly under the influence of supervision, and the scale of large certificates of deposit with a cost between general fixed deposits and structured deposits has also shrunk, and the interest rate has entered a downward channel with the environment.
Since this year, there has been a further decline in the amount and interest rate of certificates of deposit in major banks. Especially under the background of increasing income fluctuations of funds and financial products, depositors often “can’t grab” certificates of deposit. The account manager of a large bank said that the bank released a batch of large certificates of deposit with an interest rate of 3.35% in early April this year, but since then it has been reduced to 3.25%. At present, it needs the help of the corresponding account manager to make an appointment to buy it. The account manager of another joint-stock bank also said that the bank generally releases the quota at 10 a.m. every day and needs to rush regularly.
Nowadays, large certificates of deposit with an interest rate of 3.25% on the market are rare. Among large banks, taking China Construction Bank Corporation(601939) as an example, the interest rates of 3-year and 5-year time deposits from RMB 50 are both 2.75%, and the 3-year certificate of deposit has been reduced to 3.25%; In the joint-stock bank, except for China Merchants Bank Co.Ltd(600036) , the interest rate of China Everbright Bank Company Limited Co.Ltd(601818) current three-year certificates of deposit with an initial deposit of 200000 yuan is still maintained at 3.5%, and the interest rate of three-year products with an initial deposit of Ping An Bank Co.Ltd(000001) 200000 yuan is 3.40%. But on the whole, the 2-year and 3-year products listed by most banks have been sold out.
improve the ability of profit making entities
In the view of insiders, it is expected that the market-oriented adjustment of deposit interest rate will be carried out when the central bank’s interest rate benchmark remains unchanged.
On April 15, it was reported that some small and medium-sized banks received a notice from the market interest rate pricing self-discipline mechanism to encourage the floating upper limit of deposit interest rate of small and medium-sized banks to be reduced by about 10bp; This macro assessment is not required or mandatory for the bank, but it is not required to make a macro assessment.
Industry insiders generally believe that the current economy is facing great downward pressure, and the difficulties and challenges have increased significantly. The necessity of reducing enterprise financing costs has increased, and the requirements for banks to transfer profits have further increased. However, since the reduction of MLF (medium-term lending convenience) operating interest rate in January this year, the policy interest rate has remained unchanged for several consecutive months, and it is difficult to significantly reduce the quotation of LPR (loan market quotation interest rate).
In fact, since the self-discipline mechanism of market interest rate pricing changed the self-discipline upper limit of deposit interest rate formed by “x multiple of deposit benchmark interest rate” to “deposit benchmark interest rate + base point” in June last year, banks have the conditions to actively reduce the cost of liabilities. Many institutions pointed out that the combination of this adjustment and the “moderate” RRR reduction of the central bank can reduce the financing cost of the real economy from both the total amount and structure.
Zeng Gang told reporters that promoting the overall downward trend of bank deposit pricing through the self-discipline mechanism can reduce the cost of bank liabilities and reduce the impact on other aspects such as the capital market. He believes that the core principle of this adjustment model is to realize the further decline of loan costs, so as to improve the ability of banks to make profit entities Everbright Securities Company Limited(601788) Zhang Xu’s team also believes that considering that the central bank’s reduction of deposit benchmark interest rate has a great impact on prices and exchange rates, and is not conducive to the integration of deposit benchmark interest rate and market interest rate, the correct solution is to give full play to the effectiveness of LPR reform and promote the marketization of deposit interest rate.
Dai Zhifeng previously pointed out that the main intention of the market interest rate pricing self-discipline mechanism is to lower the deposit cost of small and medium-sized banks, so as to realize the downward pricing of small and medium-sized micro enterprises on the asset side. However, considering the fierce competition for deposits and the great pressure on small and medium-sized banks to attract deposits, they have to use price war to attract deposits and other factors, which may have limited overall effect.
Zhang Xu believes that banks are encouraged to actively reduce the floating ceiling of interest rate by means of MPA reward. If more banks reduce the floating ceiling, the self-discipline ceiling of deposit interest rate may also be reduced, that is, to realize the situation of “advanced” driving “backward”.
Compared with the current “cap” and “cap” of BP’s demand deposit pricing, the “cap” and “cap” of BP’s demand deposit pricing are relatively low, which has a relatively low impact on BP’s “net profit”. Assuming that the pricing of more than one-year deposits in the four major banks decreases by 5bp and that of other banks decreases by 10bp, the bank interest margin can be improved by about 0.9bp. Small and medium-sized banks with high proportion of medium and long-term deposits have greater improvement potential. In terms of business volume, Dai Zhifeng believes that considering the fierce competition, if the industry interest rate is generally lowered, the impact on the amount of bank deposits is expected to be limited.
