武乡农商银行11月20日发布公告，已于近期调整人民币存款执行利率。个人存款整存整取二年期、三年期、五年期的执行利率同步降至1.5%，其中五年期执行利率下调水平已突破国有大行挂牌利率的最低水平1.55%。①Recently, Wuxiang Rural Commercial Bank adjusted the deposit execution interest rates, lowering the execution interest rates for personal fixed-term deposits of two years, three years, and five years to 1.5%, with the five-year execution interest rate being lowered below the lowest level of the state-owned banks' published rates. ②The phenomenon of the aforementioned rural commercial bank reducing rates beyond the mid- to long-term levels of state-owned banks is still considered an isolated case.
According to the Financial Associated Press on November 20 (Reporter Guo Zishuo), since the state-owned large banks' interest rates fully entered the "1" era, although deposits rates of small and medium-sized banks like city and rural commercial banks are also in a downward cycle, they still maintain relatively high deposit rate levels.
However, the Financial Associated Press reporter noticed that recently some rural commercial banks have lowered their medium- and long-term deposit rates, and the latest interest rates have already fallen below the announced rates of state-owned large banks for the same term.
Wuxiang Rural Commercial Bank announced on November 20 that it has recently adjusted the execution interest rates for RMB deposits. The execution rates for personal deposits with fixed terms of two years, three years, and five years have all been lowered to 1.5%, among which the execution rate for five-year deposits has dropped below the minimum announced interest rate of 1.55% set by state-owned large banks.
From the perspective of industry insiders, under the background of market-oriented deposit rates, different types of banks, depending on their own liabilities or demand for deposit funds, will implement differentiated pricing for deposits of different terms. In the context of pressure on banks' net interest margins, lowering deposit rates and reducing liability costs is the choice of most commercial banks.
However, industry insiders also admit that the phenomenon of rural commercial banks lowering rates below the medium- and long-term interest rate levels of state-owned large banks is still an isolated case. Generally speaking, the medium- and long-term deposit rates of small and medium banks are still higher than those of large banks.
It is rare for rural commercial banks' medium- and long-term deposit rates to fall below the levels of state-owned large banks.
"Deposit rates are operated according to the execution rates in the announcement. The bank does not currently have any deposit-related activities." A staff member of Wuxiang Rural Commercial Bank said today that before the adjustment, the interest rate for five-year deposits was above 2%.
According to a comparison done by the Financial Association reporter with the interest rate table implemented by the bank on August 22, the execution rates for the bank's fixed deposit for two, three, and five years have decreased by 0.6, 0.8, and 0.9 percentage points respectively.
Currently, apart from the Bank of Communications announcing fixed deposit rates for two, three, and five years at 1.45%, 1.75%, and 1.80% respectively, the fixed deposit rates announced by the Industrial and Commercial Bank of China, Postal Savings Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank Corporation for the same periods are consistent at 1.20%, 1.50%, and 1.55%.
This means that after the adjustment by Wuxiang Rural Commercial Bank, the execution rate for the fixed deposit for three years has decreased to the level of state-owned banks, while the execution rate for five years has fallen below the minimum level of state-owned banks.
In addition to Wuxiang Rural Commercial Bank, the Financial Association reporter noticed that several other rural commercial banks have recently lowered the deposit rates on their special products. Additionally, some small and medium-sized banks have also made adjustments to their deposit execution rates, but the reductions are not as significant as those of Wuxiang Rural Commercial Bank.
Harbin Rural Commercial Bank, Tieli Rural Commercial Bank, and Heihe Rural Commercial Bank issued announcements on November 18, November 16, and November 15 respectively, stating that starting from November 22, they would lower the interest rates of the two deposit products "asia vets" and "fixed and flexible deposit" to the level of demand deposit rates in Heilongjiang Province.
Jieyang Rural Commercial Bank has lowered the execution rates for some deposits starting from October 29. The rates for fixed deposits for six months, one year, two years, three years, and five years have been adjusted from 1.30%, 1.60%, 1.80%, 2.05%, and 2.10% to 1.05%, 1.35%, 1.55%, 1.80%, and 1.85% respectively.
Experts: This is a singular case, but the downward trend will continue.
"Different banks have varying factors such as market competition, customer positioning, and liability structure, leading to different rhythms and amplitudes in adjusting deposit rates. This still belongs to the actions of individual rural commercial banks and does not represent a general trend," stated Dong Ximiao, chief researcher at Zhaolian, in an interview with the Financial Association reporter.
Dong Ximiao believes that generally speaking, the deposit rates of small and medium-sized banks will still be higher than those of large banks. The self-discipline mechanism for market interest rate pricing also allows small and medium-sized banks to have a larger upward adjustment range for deposit rates.
Liu Feipeng, a researcher at the postal savings bank of china, also told a reporter from Caixin that generally, small and medium-sized banks' deposit rates will be higher than those of large banks. In the context of market-oriented deposit rates, different types of banks, based on their own liability conditions or the demand for deposit funds, will adopt differentiated pricing for deposits of different terms.
He believes that the lower deposit rates of small and medium-sized banks for five-year terms compared to large banks are a market-oriented choice based on their own liability conditions. This also reflects the effectiveness of the market-oriented reform of deposit rates in china.
From a medium- to long-term perspective, the banking industry still faces certain pressure on net interest margins. Recently, the quarterly reports of listed banks show that the net interest margin of 10 listed rural commercial banks has declined compared to the end of the previous year, with only one listed rural commercial bank's net interest margin still above 2%.
Dai Zhifeng, director of zhongtai's research institute, recently predicted that the net interest margin is expected to stabilize in the fourth quarter, but there will still be significant pressure next year. The overall pricing on the asset side shows a downward trend, and the reduction in the interest rate for demand deposits in October will have a direct alleviating effect in the fourth quarter. The impact of the LPR reduction will be reflected in the first quarter of next year, and there will still be significant downward pressure on the net interest margin next year.
In Dong Ximiao's view, in the next stage, while promoting a steady decline in the overall financing costs of society, commercial banks will still face significant pressure on narrowing net interest margins and will continue to lower deposit rates to further reduce funding costs and alleviate the pressure of margin narrowing. In addition to lowering deposit rates, commercial banks should also reduce interest subsidies on deposits as well as fees beyond interest, further reducing the implicit costs of deposits.
