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Recently, a number of banks
Adjust the issuance of medium and long-term large-denomination certificates of deposit
Following the three-year and five-year large-denomination certificates of deposit
After the suspension of sale
Some banks have difficulty finding large-denomination certificates of deposit with a maturity of six months or more
In addition to reducing the new issuance quota
Many banks have also lowered interest rates on large certificates of deposit
Its three-year and five-year interest rates
It has also been reduced from the previous "3" to the current "2".
Large certificates of deposit are hard to find
Interest rates have also fallen
presently
Large state-owned banks and joint-stock banks
The issuance of large-denomination certificates of deposit has been tightened
In addition to the mainstream three-year certificates of deposit
In addition to experiencing "out of stock" and lower interest rates
Part of the bank also
Suspension of sales of large-denomination certificates of deposit with a maturity of half a year or more
At present, many bank apps such as China Construction Bank and China Merchants Bank no longer have three-year or five-year certificates of deposit.
Although there are still banks that offer three-year certificates of deposit (CDs), some banks have restrictions on who they can offer, and they only issue them to new customers. According to the App of Zheshang Bank, the bank's three-year large-value certificate of deposit with a minimum deposit of 200,000 yuan is specially marked as "exclusive for new customers", with an interest rate of 2.6%.
Minsheng Bank stopped selling large-denomination certificates of deposit with a maturity of half a year or more. On the Minsheng Bank App, only large-denomination certificates of deposit with a maturity of one month and three months are currently on sale.
In addition, according to a previous report by Jiupai News, for the three-year large-amount certificate of deposit, the staff of many bank outlets answered the same: the large-amount certificate of deposit is sold by the head office from time to time, and the national order is grabbed, and it will be snatched up in one or two days, so most of the time it is sold out, and it is recommended to often go to the bank APP to brush the notice to try your luck.
In terms of the large certificates of deposit that are on sale in various banks
The interest rate advantage is not obvious
The reporter learned that at present, the interest rate of one-year and two-year large-denomination certificates of deposit of large state-owned banks is between 1 percent and 2 percent, and the interest rate of three-year large-denomination certificates of deposit is about 2.35 percent.
Tian Lihui, dean of the Institute of Financial Development of Nankai University, said that the tightening of the issuance of large-denomination certificates of deposit was due to the decline in market interest rates and the need for banks' capital cost management. Changes in the macroeconomic environment and monetary policy have brought about an overall decline in market interest rates, and banks have adjusted the interest rates on the issuance of large certificates of deposit accordingly. At the same time, banks are under pressure from the cost of capital and are reluctant to absorb long-term deposits at a higher cost.
The enthusiasm of local small and medium-sized banks has not diminished
Compared with large state-owned banks and joint-stock banks
At present, local small and medium-sized banks
The sale of large-denomination certificates of deposit is still being actively promoted
Not only is the quota sufficient
And the interest rate of the large certificates of deposit offered is relatively high
The interest rate of some rural commercial banks on large certificates of deposit exceeds 3%
Tian Lihui believes that the reasons why small and medium-sized banks actively sell large certificates of deposit and have high interest rates are related to their capital needs, market competition and risk premiums. Many small and medium-sized banks face a larger funding gap and therefore need to raise funds by issuing large certificates of deposit. And, in order to compete with the big banks, smaller banks with weaker brands and creditworthiness need to offer more attractive products. In addition, small and medium-sized banks may be considered to be relatively risky compared to large banks and therefore need to offer higher interest rates as a risk premium.
Why did the large certificates of deposit "disappear"?
According to data disclosed by the State Administration of Financial Supervision and Administration, at the end of the fourth quarter of 2023, the net interest margin of commercial banks fell below 1.7% to 1.69%. This level of net interest margin is below the "warning line" of 1.8% for the self-regulatory mechanism in the Implementation Measures for Qualified Prudential Assessment (2023 Revision).
Over the past year, interest rate spreads have continued to narrow, which has become one of the operating pressures faced by banks. According to the "2023 Review and Future Outlook of China's Listed Banks" recently released by Ernst & Young, the net interest margin of 58 listed banks has declined for four consecutive years, and the net interest margin in 2023 will be 1.69%. In the first quarter of this year, 22 of the 24 listed banks that have disclosed net interest margin data continued to narrow.
Take Minsheng Bank as an example. According to the annual report, as of the end of last year, the net interest margin of Minsheng Bank was 1.46%, a year-on-year decrease of 0.14 percentage points. The annual report explained that the decline in net interest margin was mainly due to the decline in asset-side pricing, and the rigidity of debt costs. Li Bin, vice president and secretary of the board of directors of Minsheng Bank, said at the results conference that the net interest margin of the whole industry is expected to continue its downward trend in 2024.
What does "low net interest margin" mean?
As one of the important indicators to measure the profitability and risk level of commercial banks, the narrowing of net interest margin means that the pressure on bank profitability increases. Under such circumstances, strengthening the cost control of the liability side and giving up high-interest deposits has become an inevitable choice for commercial banks.
At the Bank of China's 2023 results conference, Zhang Yi, deputy governor of the Bank of China, said that in 2024, the Bank of China will increase the pressure on high-cost deposits, including agreement deposits, structured deposits and large-amount certificates of deposit with a maturity of more than 3 years.
Judging from the signals released by the regulators, in the future, banks will be further guided to reduce the cost of debt and strengthen the cost control of the debt side. The "Report on the Implementation of China's Monetary Policy for the First Quarter of 2024" released by the central bank on May 10 specifically mentioned that it is necessary to "implement the market-oriented adjustment mechanism of deposit interest rates, prevent high-interest rate deposits, maintain the order of market competition, and strive to stabilize the cost of bank liabilities".
Chita D:
According to the May financial data recently released by the People's Bank of China, RMB deposits increased by 9 trillion yuan in the first five months of 2024, of which household deposits increased by 7.13 trillion yuan, deposits of non-financial enterprises decreased by 2.45 trillion yuan, fiscal deposits increased by 575.9 billion yuan, and deposits of non-banking financial institutions increased by 2.39 trillion yuan.
Source: Securities Daily, China Economic Network, China Economic Weekly, People's Bank of China, Southern Metropolis Daily, Zhongxin Jingwei, Jiupai News, Guangzhou Radio and Television Station