A number of banks have announced: downgrade!

After state-owned banks and joint-stock banks collectively lowered deposit interest rates, a number of small and medium-sized banks also lowered deposit interest rates one after another, with a reduction range of 5-25 basis points.

Small and medium-sized banks cut deposit rates

A few days ago, the deposit interest rates of 18 state-owned banks and joint-stock banks have been adjusted. Recently, Bank of Jiangsu, Bank of Changsha, Bank of Xiamen, Bank of Hunan, Guangxi Longsheng Rural Commercial Bank and other small and medium-sized banks have followed up to reduce deposit interest rates, with a reduction of 5-25 basis points.

On July 29, Bank of Jiangsu announced the latest deposit interest rate table. The bank's deposit interest rate was lowered by 10-20 basis points, and the three-month, six-month, and one-year lump sum deposit rates were all lowered by 10 basis points to 1.1%, 1.35%, and 1.45%, respectively. The interest rates on two-year, three-year and five-year lump sum deposits were all lowered by 20 basis points to 1.65%, 1.95% and 1.95% respectively.

After the adjustment, the current deposit interest rate of Bank of Jiangsu is the same as that of state-owned banks and joint-stock banks, and the interest rate of fixed deposits of various maturities is slightly higher than that of state-owned banks and most joint-stock banks, but the interest rates of one-year, two-year and three-year fixed deposits are lower than those of Zheshang Bank, Bohai Bank and Hengfeng Bank among joint-stock banks.

Source: Bank of Jiangsu official website

After the recent reduction of deposit interest rates, some city commercial banks still maintain certain advantages in interest rates. For example, the Bank of Xiamen announced that the bank will adjust the listed interest rate of some deposit products from August 3, with a reduction of 5-20 basis points. Among them, demand deposits were lowered from 0.25% to 0.2%. The interest rates on semi-annual and one-year lump sum deposits were lowered by 10 basis points to 1.5% and 1.7% respectively. The interest rates on two-year, three-year and five-year lump sum deposits were all lowered by 20 basis points to 2.0%, 2.3% and 2.3% respectively.

Source: Bank of Xiamen official website

Hunan Bank announced that since August 1, the bank has lowered the interest rate on deposits, and the adjusted interest rates for three-month, half-year, one-year, two-year, three-year, and five-year fixed deposits are 1.3%, 1.5%, 1.7%, 1.8%, 2.15%, and 2.15% respectively, all of which are higher than the limited deposit interest rates of state-owned banks and joint-stock banks in the same period.

In addition, Guangxi Longsheng Rural Commercial Bank announced that it will adjust the listed interest rate of some deposit products from August 1. Among them, the demand deposit rate was lowered by 5 basis points, from 0.15% to 0.1%. The interest rates on six-month, one-year and two-year fixed deposits were lowered from 1.75%, 2.15% and 2.55% to 1.55%, 1.9% and 2.3% respectively.

Reduce the cost of debt

Lou Feipeng, a researcher at the Postal Savings Bank, said, "Since 2022, banks have lowered deposit interest rates, and generally promoted them in the order of large banks, joint-stock banks, and small and medium-sized banks. This round of deposit rate cuts is also the first for large banks to cut it, and joint-stock banks are fast following, and it is expected that small and medium-sized banks will also follow. Lou Feipeng believes that at present, the net interest margin of banks is at a low level, and the downward pressure on the net interest margin of banks after the LPR is lowered, and the decline in the cost of bank liabilities is slower than that of the yield on the asset side, so it is necessary to take quick measures to reduce the cost of debt.

Talking about the characteristics of this round of deposit interest rate cuts, Tan Yiming, a fixed income analyst at Minsheng Securities, believes that first, it covers a wide range of areas and is a relatively comprehensive deposit rate cut. In previous rounds of deposit interest rate reductions, some of them did not adjust demand deposits, and some did not adjust call deposits and agreement deposits, but this round of adjustment covers not only demand and time deposits, but also "quasi-demand" deposits of call deposits and agreement deposits. Second, the decline in the interest rate on long-term deposits is higher than that on short-term deposits. Among them, the interest rate of fixed deposits of two years and above has been reduced the most, mostly at 20 basis points and above. The reason for this is that the cost of bank liabilities has been slow to decline under the trend of fixed-term deposits.

Industry insiders believe that the reduction of deposit interest rates has opened up room for the downward movement of loan interest rates. In addition, it may reduce the attractiveness of bank deposits, and some funds will be "moved" to bank wealth management, goods-based, bond-based and other products, and the demand for institutional debt allocation may increase.

Source: China Economic Net

Editor-in-charge: Fang Shujing, Zhao Peng, Chen Zhaoyue

Editor: Wu Yunhuan