According to China Merchants, at present, the personal housing loans of the four major banks account for about 30%. This LPR adjustment is expected to directly lead to a reduction in interest spreads by about 4BP, most of which will be reflected in 2023, taking into account the sharp decline in newly issued mortgage rates. The actual impact is greater; it is expected to reduce the spread between share banks by about 3BP on average. Due to the relatively low proportion of mortgage loans, the direct impact of urban agricultural commercial banks is relatively small. For bank performance, both volume and price are important, if there is a price but no quantity, the performance is also under pressure. Therefore, if the LPR downgrade can lead to a significant improvement in real estate sales and improved credit demand, it may not be bearish in the end.