Financial Services Association, July 26 (Reporter Gao Ping) On the day after the major bank adjustments, several stock banks followed up on adjustments to deposit listing interest rates today. China Merchants Bank and Ping An Bank both updated and adjusted deposit listing interest rates today. Judging from the extent of the cuts, there is a certain difference between the two banks. Among them, Ping An Bank's listed interest rate reduction for individual term deposits reached a maximum of 30BP.

As of press release, the official websites of other stock banks have not been updated to adjust deposit listing interest rates. Industry insiders told the Financial Federation reporter that lowering interest rates on deposits will help banks reduce debt-side costs, ease pressure on net interest spreads, and improve profitability. At the same time, it can create space for lower loan interest rates and further reduce financing costs for the real economy. Looking ahead, other joint stock banks and small to medium banks are likely to follow up on deposit interest rate adjustments one after another.

The two stock banks quickly followed up and adjusted the deposit listing interest rate reduction, and there was a difference in the rate of reduction

The official websites of China Merchants Bank and Ping An Bank have all updated the adjusted deposit listing interest rates. The new interest rates will be implemented from July 26. A Financial Services Association reporter discovered that judging from the adjustment range of interest rates listed for full deposits and time deposits, there is a certain difference between China Merchants Bank and Ping An Bank.

China Merchants Bank made the same adjustments as major banks. Among them, interest rates for 1-year terms and below were reduced by 10 basis points, and 2-year, 3-year, and 5-year terms were reduced by 20 basis points. Ping An Bank also cut interest rates for one-year terms and 20 basis points for 3-year and 5-year terms. However, the 2-year term reduction was 30 basis points.

Specifically, after the adjustment, China Merchants Bank's full deposit interest rate is 1.05% for three months, 1.25% for six months, 1.35% for one year, 1.45% for two years, 1.75% for three years, and 1.80% for five years. After adjustment, Ping An Bank interest rate of 1.1% for three months, 1.35% for six months, 1.55% for one year, 1.6% for two years, 1.8% for three years, and 1.85% for five years.

At the same time as deposit listing interest rates were adjusted, interest rates for large deposit accounts at many banks were also adjusted accordingly. For example, the ICBC mobile banking app showed on July 22 that the 1-year, 2-year, and 3-year interest rates were 1.8%, 1.9%, and 2.35% for the bank's large deposit statements starting at 0.2 million yuan. On July 26, interest rates for large deposits with the above terms were reduced to 1.7%, 1.7%, and 2.15%, respectively. Also, the CCB mobile banking app showed that the bank's maximum annual interest rate for large deposit cards was 2.35%, while July 26 showed a maximum of 2.15%.

At the same time, many bank deposit execution interest rates have also been adjusted accordingly. For example, the China Merchants Bank mobile banking app shows that interest rates for 6-month, 1-year, and 2-year deposits starting at 1,000 yuan in the bank's specialty deposits on July 22 were 1.85%, 1.95%, and 2.15%, respectively. On July 26, the bank's 6-month and 2-year special deposit interest rates were 1.75% and 1.95%, respectively, and there were no products displayed for 1-year terms.

The industry expects that the “deposit migration” phenomenon may strengthen bank financial management and usher in incremental capital

Since 2022, deposit listing interest rates have been lowered many times. Major commercial banks took the initiative to lower deposit listing interest rates in September 2022, June 2023, September 2023, and December 2023, respectively, and encouraged small and medium-sized banks to lower deposit interest rates one after another. In previous adjustments, joint stock banks generally followed up or individual stock banks adjusted at the same time as state-owned banks, while regional banks adjusted in stages. As far as other banks are concerned, the industry believes that the pace and extent of adjustments by different banks may be carried out according to their own circumstances and with reference to similar banks.

Looking ahead to the later stages, Wang Qing, chief macro analyst at Dongfang Jincheng, also believes that after the current adjustment of deposit interest rates at major state-owned banks, other commercial banks will follow suit, and bank deposit interest rates may continue to decline until the real estate industry recovers steadily.

Wen Bin, chief economist at China Minsheng Bank, said that this round of deposit interest rate cuts is the fifth round of active adjustments made by commercial banks based on their own business conditions and market conditions after the establishment of a market-based adjustment mechanism for deposit interest rates. It is a reflection of the more market-based deposit interest rate made by the six major banks based on the recent decline in 1-year LPR and market interest rate trends such as treasury bond yields.

Wen Bin believes that this adjustment is conducive to stabilizing bank debt costs and improving the sustainability of the real economy of financial services; promoting investment and consumption of enterprises and residents, and helping stabilize the economy and improve efficiency; at the same time, under the new monetary policy regulation framework, the 7-day reverse repurchase interest rate is also gradually being bridged.

What is the impact of interest rate cuts on deposits? The chief economist of CITIC Securities clearly stated that for banks, cutting interest rates on deposits is beneficial to controlling interest costs, but at the same time, it will also make it more difficult to collect savings, posing a greater challenge to debt-side stability. As far as the market is concerned, a reduction in deposit interest rates may push broad-spectrum interest rates, including interest rates on treasury bonds, to a further decline. At the same time, the phenomenon of “deposit moving” may intensify, and low-risk asset management products such as bank financial management will usher in incremental capital to increase the strength of bond market allocation.

“This round of deposit interest rate cuts may push larger deposits to 'move' to financial management. At the same time, along with the decline in deposit returns, it may also have a certain effect on promoting consumption in the short term.” Wang Qing said.