The scale of structured deposits continues to drop
Related business risks are further controlled
Our reporter Guo Ziyuan
In the case of financial regulators' efforts to rectify market chaos, the scale of structured deposits continues to drop, and related business risks are being further controlled.
According to the latest statistics on credit income and expenditure of financial institutions released by the People’s Bank of China, as of the end of October 2020, the balance of domestic personal structured deposits in large Chinese banks was 1.59 trillion yuan, and the balance of structural deposits in domestic units was 1.46 trillion yuan. The peak period of the participants was 2.58 trillion yuan in March this year and 1.87 trillion yuan in May this year, both showing a relatively large decline.
Compared with large banks, the size of structured deposits in small and medium-sized banks has dropped even more.
According to data from the Central Bank, as of the end of October 2020, the balance of domestic personal structured deposits in small and medium-sized Chinese banks was 1.52 trillion yuan, and the balance of structured deposits in domestic units was 3.37 trillion yuan. The peak periods of the two were 22,800 in April this year. 100 million yuan and 5.63 trillion yuan.
The so-called "structured deposits" is simply "deposits + financial derivatives", that is, deposits embedded in financial derivatives absorbed by commercial banks.
Since the beginning of this year, the structured deposit business of some banks has rebounded rapidly, the incremental growth rate is "double high", and the interest rate is high, which has intensified irrational competition in the deposit market and even caused some chaos.
For example, individual companies use the low-interest loan funds obtained during the epidemic to purchase structured deposits to obtain high returns and thus carry out arbitrage.
In addition to arbitrage, structured deposits also have many irregularities in product design and daily sales, which are prominently manifested as "fake structure" problems.
"Individual banks have set a'floor return' for structured deposits that is much higher than the interest rate level of deposits of the same maturity, constructing a narrow return fluctuation range, or setting the exercise conditions of linked derivatives as almost impossible triggers." The relevant person in charge of the Beijing Banking and Insurance Regulatory Bureau said that, as a result, the structured deposits are called "floating income products", which are actually "fixed income products", that is, "false derivative real guaranteed income."
The person in charge stated that, what’s more, financial derivatives are not actually embedded in the structured deposits of individual banks, or the embedded financial derivatives do not have real counterparties and transaction behaviors. This is suspected of setting up a “fake structure”. "High interest rates in a disguised form to attract savings has disrupted the order of market competition and raised the price of funds.
Based on the above risks, in order to curb market chaos and standardize business development, financial regulatory authorities have issued window guidance to some banks, requiring them to reduce the size of structured deposits to the level at the beginning of the year before September 30, 2020. The scale will be reduced to two-thirds of the end of the previous year before 31st.
"At present, the pressure drop effect of small and medium-sized banks is significant. According to the statistics of Rong360 Big Data Research Institute, the size of unit structured deposits in September 2020 decreased by 33.23% from the peak in April." Liu Yinping, researcher at Rong360 Big Data Research Institute Say.
Liu Yinping believes that although many banks have completed the first phase of the pressure drop target, the pressure drop task in the fourth quarter is still arduous. "If the pressure drop in the previous few months is followed, the pressure drop task should be completed before the end of this year." .
It is worth noting that, in response to arbitrage, the Beijing Banking and Insurance Regulatory Bureau has issued the "Notice on Risk Reminders for Structured Deposit Business", which clearly requires banks to strengthen the screening of the source of structured deposit funds for purchasing units to prevent individual companies from using Low-cost credit funds obtained by banks are used for idling arbitrage.
"In the next stage, the Beijing Banking and Insurance Regulatory Bureau will continue to track and monitor the development of structured deposit business of commercial banks, conduct on-site inspections of banks that are not sufficiently pressured, and take corresponding regulatory measures for existing violations of laws and regulations." The person in charge said .
Guo Ziyuan