Recently, six major state-owned banks in China, including Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), China Construction Bank (CCB), Bank of China (BOC), Bank of Communications (BOCOM), and Postal Savings Bank of China (PSBC), have adjusted their deposit挂牌 interest rates downwards. This follows a similar adjustment made in July of this year and represents another round of concentrated adjustments. According to the official websites of ICBC, ABC, CCB, BOC, and BOCOM, the挂牌 interest rates for fixed deposits with terms of 1 year, 2 years, 3 years, and 5 years have been reduced to 1.1%, 1.2%, 1.5%, and 1.55%, respectively.
"The adjustment of deposit挂牌 interest rates this time varies in terms of term and structure, with a relatively larger decrease in interest rates for medium and long-term deposits," said Li Yifan, a researcher at the Bank of China Research Institute. Overall, the interest rate adjustments for deposits across various banks range from 5 to 25 basis points. Specifically, the interest rate for demand deposits has been reduced by 5 basis points to 0.1%; the interest rate for 7-day notice deposits has been lowered by 25 basis points to 0.45%; and the interest rates for fixed deposits with terms of 1 year, 2 years, 3 years, and 5 years have all been reduced by 25 basis points, indicating a significant adjustment.
Following the announcement by the state-owned banks to lower their deposit挂牌 interest rates, several joint-stock banks have also made a new round of adjustments to the interest rates of different types of deposits. From the adjustments made by joint-stock banks, the banks that have disclosed their adjustments have generally kept pace with the large banks, that is, the interest rate for demand deposits has been reduced by 5 basis points, and the interest rate for fixed deposits has been generally lowered by 25 basis points. It is expected that more banks will follow suit and adjust their rates in a timely manner.
Experts have indicated that this adjustment of deposit interest rates reflects the effective operation of the People's Bank of China's (PBOC) interest rate policy transmission mechanism. Previously, PBOC Governor Pan Gongsheng emphasized at the Lujiazui Forum the need to further improve the market-oriented interest rate control mechanism. On September 27, the PBOC lowered the central bank's policy interest rate, namely the 7-day reverse repo operation interest rate in the open market, from 1.7% to 1.5%, leading to a 0.3 percentage point decrease in the medium-term lending facility rate. The Loan Prime Rate (LPR) reported on October 21 also correspondingly decreased, indicating that the market-oriented interest rate control mechanism has been further improved and the interest rate transmission channels have been effectively unblocked.
Compared to the PBOC's deposit benchmark interest rates, deposit挂牌 interest rates have a stronger autonomy, granting banks greater flexibility and room for proactive adjustment. Li Yifan believes that this round of interest rate adjustments is mainly an active adjustment made by banks based on changes in market conditions and their own asset-liability management needs, which helps to consolidate the foundation for sustainable bank operations.
From the perspective of assets, this year, banks have adhered to the principle of serving the high-quality development of the real economy, continuously increasing the efforts to benefit the real economy, and promoting the reduction of the comprehensive financing costs of实体 enterprises by prudently lowering loan interest rate levels. At the same time, the policy for existing housing loan mortgage interest rates is continuously optimized, and banks face pressure to reduce existing housing loan interest rates, which limits the level of loan returns.
From the perspective of liabilities, recent financial market fluctuations have led to a more cautious risk preference among investors, resulting in a phenomenon of deposit termization to a certain extent, affecting the interest spread level. At the end of the second quarter, the net interest margin of commercial banks was 1.54%. Although it was flat month-on-month, it was 20 basis points lower year-on-year and still at a historical low. The continuously compressed net interest margin poses challenges to the operation of commercial banks.
Lou Feipeng, a researcher at Postal Savings Bank of China, believes that in order to better support the continuous recovery of the economy, banks still need to reduce the financing costs of the real economy. Under the condition that the net interest margin of banks is already at a low level, reducing both loan and deposit interest rates can help banks better balance assets and liabilities, and enhance the sustainability of serving the real economy.
Li Yifan said that this round of deposit interest rate reduction is a manifestation of banks fully utilizing the market-oriented adjustment mechanism of deposit interest rates. By repricing different deposit products, it helps to consolidate the foundation for sustainable operations and also creates room for banks to subsequently reduce loan interest rates for weak links, key areas, and emerging fields of the real economy, demonstrating the responsibility to support the real economy.
Experts have said that in the future, banks will continue to optimize liability management, promote deposit interest rates to remain at a relatively reasonable level, and ensure sustainable operation and development. First, they will reasonably adjust the scale and structure of various deposit products, actively seize the opportunity of deposit activation, and reduce the proportion of high-cost deposits. Second, they will improve market sensitivity, effectively use the market interest rate pricing self-discipline mechanism and the market-oriented adjustment mechanism for deposit interest rates, and dynamically differentiate the pricing of different deposit products' interest rates by comprehensively considering factors such as economic conditions, deposit costs, and expected returns. Third, they will closely follow the macroeconomic and financial situation and customer needs, develop diversified intermediate businesses such as wealth management, custody, fund distribution, and insurance agency in a prudent and cautious manner, work diligently in the field of diversified financial services, continuously promote product and service innovation, and explore more growth points.