Lowering deposit interest rates for small and medium-sized banks, transforming their thinking and seeking transformation
2023-04-24
According to incomplete statistics, since April, more than 20 small and medium-sized banks (including local rural credit cooperatives), including Hubei Luotian Rural Commercial Bank and Jiaozuo Jiefang Rural Commercial Bank, have announced adjustments to bank deposit product interest rates, some of which have been reduced by 45 basis points. In addition, the reporter found through research that the interest rates of deposit products of some state-owned large banks have also been slightly reduced. Industry insiders say that under the trend of regulatory authorities guiding long-term deposit limit interest rates to decline, the price advantage of small and medium-sized banks in the "deposit competition" may gradually be weakened. In the future, small and medium-sized banks should actively change their business ideas, accelerate Digital transformation, and increase customer stickiness by improving local customer service experience. Multiple banks have lowered deposit interest rates. On April 21st, Liaocheng Shanghai Rural Commercial Rural Bank announced that it will adjust the RMB deposit listing rate starting from April 22nd. The annual interest rates for both three-year and five-year fixed deposits have been reduced by 5 basis points; The annual interest rate for seven day notice deposits has been reduced by 50 basis points. In addition, since April, more than 20 small and medium-sized banks, including Gushi Agricultural Bank, Hubei Luotian Agricultural Bank, and Jiaozuo Jiefang Agricultural Bank, have adjusted the interest rates of some deposit products. This round of deposit interest rate reduction for small and medium-sized banks is more of a follow-up to the adjustment of interest rate self-discipline mechanism and a 'supplementary reduction', "said Zhang Wei, fixed income analyst at Tianfeng Securities. Some banks have also undergone several adjustments before. For example, Jiaozuo Jiefang Rural Commercial Bank issued a notice in November last year to lower the deposit listing interest rate. In January of this year, it raised the one-year, two-year, and three-year deposit interest rates by 30-45 basis points, respectively. On April 10th, the bank issued another announcement to restore the deposit interest rate for the aforementioned period to the level of November last year. Some small and medium-sized banks that have lowered their deposit listing rates since April are mostly in this situation. It is worth noting that some state-owned banks have also adjusted the interest rates of some deposit products. For example, the relevant staff of the Beijing Branch of Bank of Communications stated that starting from April 1st, the interest rates for the three-year product deposits with a minimum deposit of 10000 yuan and a minimum deposit of 50000 yuan for new funds are 3.05% and 3.1%, respectively, a decrease of 5 and 15 basis points compared to the previous 3.1% and 3.25%, respectively. For a long time, small and medium-sized banks still have a price advantage, and higher deposit interest rates have been one of their important ways of absorbing deposits. Industry insiders say that the follow-up reduction of deposit interest rates by small and medium-sized banks this time will to some extent weaken their relative price advantage. However, from the current interest rates, compared to state-owned banks and joint-stock banks, small and medium-sized banks still have a price advantage when absorbing deposits. Lv Shuang, a senior analyst in the financial industry at Industrial Research, said that previously, the fixed deposit interest rate curve of local small and medium-sized banks was steeper than that of national banks, and there was a significant price advantage over national banks in terms of fixed deposits with maturities of over 3 years. However, with the downward trend of long-term deposit limit interest rates, the price advantage of small and medium-sized banks in the "deposit competition" may gradually be weakened. From the perspective of deposit structure, taking urban commercial banks as an example, the growth of deposits in local small and medium-sized banks in the past five years has mainly been driven by personal fixed deposits. In the future, with the decrease of fixed deposit interest rates of local small and medium-sized banks, the difficulty of local small and medium-sized banks absorbing deposits from price sensitive customers will increase, which also increases the difficulty of small and medium-sized banks in attracting deposits from price sensitive customers
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：China Secruities Dairy
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