According to a research report released by GF Securities, as of the disclosure data received, around 42% of banks out of all currently disclosed data have increased their interbank CD quota for 2024 compared to 2023, and state-owned banks have generally increased or maintained their quotas, with no bank shrinking. As of the end of June 2024, the usage rates of state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks' CD quotas are 71.85%, 72.49%, 58.22%, and 44.49%, respectively. The CD quota usage rate of state-owned banks has significantly increased year on year, and some banks have approached their limit. Several state-owned banks have approached their limits, while state-owned banks still have room for growth, and joint-stock banks have limited space. Due to the policy direction of idle capital, it is not expected that state-owned banks will update their record quotas this year.

How is the supervision of deposit records carried out? The 'Interbank CD Management Interim Measures' stipulate that the supervisory points for deposit records include one-time registration, balance management, and the ability to increase record quotas following significant or substantive changes. At the same time, according to Document No. 127, the annual upper limit for interbank CD quota is: (interbank CD quota + interbank liabilities) / (interbank CD quota + total liabilities-interbank CD balance) <= 1/3.

What is the situation of bank record quotas for 2024? According to the disclosure by the China Monetary Network, as of June 30, 2024, a total of 377 banks published their registration of CD issuance for 2024, with a total amount of 27.27 trillion yuan. Correspondingly, as of June 30, 2019, 460, 434, 390, 403, and 379 banks published the annual CD issuance registration, with a total amount of 17.22 trillion yuan, 17.15 trillion yuan, 18.87 trillion yuan, 22.19 trillion yuan, and 25.65 trillion yuan, respectively, accounting for 99.35%, 99.93%, 98.40%, 99, 90%, and 99.89% of the total annual registration. The scale of CD record quota has further significantly increased in 2024. From the scale of record quota, the interbank CD record scale for the first half of the year is 1.62 trillion yuan higher than that of the same period last year, of which state-owned banks accounted for 0.84 trillion yuan, joint-stock banks accounted for 0.19 trillion yuan, city commercial banks accounted for 0.46 trillion yuan, and rural commercial banks accounted for 52 billion yuan. According to a research report released by GF Securities, as of the disclosure data received, around 42% of banks out of all currently disclosed data have increased their interbank CD quota for 2024 compared to 2023, and state-owned banks have generally increased or maintained their quotas, with no bank shrinking, while the growth rate of the quotas of state-owned large banks was significantly higher than that of other sectors.

What is the situation of bank CD record usage in the first half of the year? As of the end of June 2024, the usage rates of state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks' CD quotas are 71.85%, 72.49%, 58.22%, and 44.49%, respectively, with year-on-year changes of +14.3pct, +12.78pct, +1.32pct, and -4.51pct. The CD quota usage rate of state-owned banks has significantly increased year on year, and some banks have approached their limit. Please refer to the table in the text for more details.

(1) State-owned banks still have room for growth, while joint-stock banks have limited space. As of the end of March 2024, the ratio of the NCD quota to interbank liabilities of state-owned banks is 15.54%, and except for Bank of Communications with a slightly higher ratio of 26.81%, other state-owned banks still have significant space from the regulatory upper limit; the ratio of the NCD quota to interbank liabilities of joint-stock banks is 32.76%, which has approached regulatory requirements, and there is little room for growth. In addition, the ratios of NCD quotas to interbank liabilities of city commercial banks and rural commercial banks are 32.36% and 17.89%, respectively. (2) Due to the policy direction of idle capital, it is not expected that state-owned banks will update their record quotas this year. Historically, only a few city and rural commercial banks have updated their record quotas due to their deposit scale exceeding their record quotas. State-owned banks have not set a precedent yet. Considering the policy direction of the PBOC to reduce interbank credit and decrease idle funds, it is not expected that state-owned banks will apply to change their record quotas for CD issuance.

Risk Warning: (1) Excessive decline in economic growth; (2) The fiscal policy is weaker than expected; (3) International economic and financial risks exceed expectations; (4) Policy regulation is more severe than expected.