Several small and medium-sized banks have followed suit in lowering the interest rates of some time-limited deposits. Multiple banks have announced that they will lower their fixed deposit posted rates starting from June, and some banks will also adjust their current deposit posted rates. From the perspective of the magnitude of the adjustment, the different banks have varying degrees of decrease, individual period deposit rates being decreased by up to 30 basis points.

Industry insiders told Cailian Press that the adjustment of deposit posted rates by some small and medium-sized banks is a continuation of the new round of deposit rate reductions at the end of last year, mainly to let banks benefit the real economy. Against the background of continuous decline in loan interest rates, the bank's interest spreads have been further compressed, and the adjustment of the deposit interest rate is a market-oriented adjustment that banks make according to their own operational needs, in order to reduce the cost of liabilities through the adjustment of deposit interest rates. The adjustment time and magnitude vary from bank to bank based on their own needs and the reference to similar banks.

Several small and medium-sized banks have adjusted their deposit posted rates with varying decreases.

Guangxi Binyang Rural Commercial Bank announced its latest notice that it will adjust the posted rate of RMB current deposits starting from June 5th. The adjusted RMB current deposit posted rate is 0.2%. Historical information shows that since September 20, 2023, the bank's RMB current deposit posted rate has been 0.25%.

In addition to the posted rates of current deposits, Cailian Press found that several small and medium-sized banks have adjusted the posted rates of fixed deposits starting from June 1st. For example, Chenghai Rural Commercial Bank of Guangdong announced that it will adjust the posted rate of RMB deposits starting from June 1st. After the adjustment, the specific implementation rates of 1-year, 2-year, 3-year, and 5-year fixed deposits are 1.7%, 1.9%, 2.2%, and 2.2%, respectively. The bank's adjusted rates after November 1st last year were 1.78%, 2%, 2.4%, and 2.45%, respectively.

Pingle Rural Cooperative Bank of Guangxi also adjusted the posted rate of RMB deposits starting from June 1st. After the adjustment, the specific implementation rates of 1-year, 2-year, 3-year, and 5-year fixed deposits are 1.9%, 2.3%, 2.8%, and 2.8%, respectively. Cailian Press found that since December 20, 2023, the aforementioned period deposit rates adjusted by the bank were 2.1%, 2.3%, 3.0%, and 3.1%, respectively.

Coincidentally, Fuchuan Rural Commercial Bank of Guangxi also adjusted the posted rates of some RMB deposits starting from June 1st, and after the adjustment, the posted rates of 3-year and 5-year fixed deposits were 2.8% and 3.2%, respectively. This is not the first time the bank has issued an announcement regarding adjustments this year. Historical information shows that since February 7th, the bank has adjusted the posted rates of some RMB deposits, and after the adjustment, the posted rates of 3-year and 5-year deposits were 3.2%.

The adjustment of deposit rates often presents a pattern of state-owned banks leading the way, joint stock banks quickly following, and other banks following suit in an orderly manner. From a chronological perspective, in the eyes of industry insiders, the adjustment of deposit rates by some regional banks is a continuation of the third round of commercial bank deposit rate reductions at the end of last year. Banks reduce deposit posted rates in order to lower the cost of liabilities, stabilize their interest spreads, and reduce long-term deposit rates. The time and magnitude of the adjustments will also vary according to the banks' own needs and the reference to similar banks.

Zhou Maohua, an analyst in the financial market department of China Everbright Bank, also believes that the adjustment of deposit rates by some small and medium-sized banks is a continuation of the third round of reductions last year. According to market demand and their own operational situation, some small and medium-sized banks make reasonable use of the market-oriented deposit rate adjustment mechanism, reduce their cost of liabilities, improve their operations, and expand the space for benefiting the real economy through the adjustment of deposit interest rates.

Will there be a new round of deposit rate cuts, which is the focus of the market's attention.

In fact, since April, banks have implicitly implemented the reduction of deposit rates by stopping "handmade interest supplements", discontinuing the sale of intelligent notice deposits, and temporarily suspending the sale of long-term large-denomination deposits under quota restrictions. Many small and medium-sized banks have also lowered their fixed deposit posted rates intensively.

After two rounds of deposit rate cuts in June and September last year, the new round of adjustment that began in December last year is the third large-scale and substantial reduction of deposit rates. The market is more concerned about whether there will be a new round of deposit rate cuts this year.

Considering the time rules for deposit rate cuts, the pressure of bank interest spreads, and the issue of fixed deposit terms, analysts at Citic Securities believe that the market is likely to welcome a new round of deposit rate cuts in the second and third quarters of this year. "If deposit rates are cut, referring to historical experience, it may push a wide range of interest rates including government bond yields further down. At the same time, low-risk asset management products such as bank wealth management products will receive incremental funds, increasing the debt market allocation force."

The People's Bank of China established a market-oriented deposit rate adjustment mechanism in 2022. Commercial banks can refer to the reasonable adjustment of deposit rates based on the 10Y national bond yields and 1Y LPR. Zhang Xu, an analyst at China Everbright Securities, said that at the end of the first quarter of this year, the 10-year national bond yield was 2.29%, which was 27bp lower than the end of the fourth quarter last year. It is determined that there will be multiple rounds of deposit rate cuts within 2024, and they will adopt the pattern of "state-owned banks leading the way, joint stock banks quickly following, and other banks following suit in an orderly manner".

In May, the National Development and Reform Commission, the People's Bank of China and four other departments issued a notice on key work for reducing costs in 2024, proposing to promote a stable and downward trend of loan interest rates. It will continue to play an important role in the reform of the loan market quoted interest rate (LPR) and the market-oriented adjustment mechanism of deposit interest rates to promote a stable and downward trend in the comprehensive financing cost of society, while maintaining the basic stability of commercial banks' net interest margins. In the view of Dongxing Securities analyst Lin Jinlu, the current policy emphasizes the stable interest rate spread of banks, preventing high-interest-rate deposit raising, and it is expected that the self-discipline mechanism for interest rates will continue to maintain the deposit competition order, and the listed deposit rates of banks may be further lowered. Zhou Maohua also believes that currently, there is still room for a certain adjustment in deposit interest rates due to the large pressure on bank's net interest margins and the low market interest rates.