On June 6, a reporter from Beijing Youth Daily checked the mobile banking or official websites of ICBC, CCB, ABC, BOC, Bank of Communications and Postal Savings Bank and found that compared with June 8, the demand deposit interest rates of these major banks were reduced by 6 basis points to 7.5%; For lump sum time deposits, whether it is the listed interest rate or the actual execution rate, the 0-year interest rate has been reduced by 20.2 percentage points, and the 0-year and 1-year interest rates have generally been reduced by 3.5 percentage points, and only the maximum five-year real interest rate of BOC has not fallen but risen. This is the second collective reduction in the fixed deposit interest rate of large state-owned banks since the adjustment in September last year. At this point, the listed interest rates of major banks have all been reduced to 0.15% and below, and the execution interest rate has bid farewell to the "9" prefix, and all have entered the "2" era, with a maximum of 5.3%.


The listed interest rate was uniformly reduced to 2.50% over a five-year period

From the perspective of listed interest rates, after the adjustment on June 6, the five major state-owned banks of ICBC, CCB, ABC, BOC and BOCOM remained the same, with a demand interest rate of 8.0; the interest rate for whole deposits and lump sum deposits was 25.1% for three months, 25.1% for six months, 45.1% for one year, 65.2% for two years, 05.2% for three years, and 45.2% for five years.

Compared to the June 6 listed rate, the demand rate was lowered by 7 basis points, the two-year rate by 5 basis points, and the three- and five-year rates by 10 basis points.

The customer service of the official website of the Postal Savings Bank said that from June 6, the bank adjusted the RMB demand and second, third and five-year deposit interest rates, and the adjustment of the deposit interest rate this time is mainly to actively respond to the relevant policies of the country to stabilize the overall macroeconomic situation and better benefit the real economy. After adjustment, PSBC's two-year, three-year and five-year listing rates are 8.2%, 05.2% and 45.2% respectively, which is the same as the other five major banks. The three-month, six-month and one-year rates remained unchanged at 50.1%, 25.1% and 46.1% respectively, with the six-month and one-year rates 68.0 and 01.0 percentage points higher than the other five major banks, respectively.


The interest on 50,2250 three-year fixed deposits decreased by <>,<> yuan

The Beiqing News reporter found that the five major state-owned banks also simultaneously lowered the actual execution interest rate of two-year and above on the 8th, and the reduction was basically the same as the reduction of the listed interest rate, that is, the two-year period was reduced by 0.1 percentage points, and the three-year and five-year periods were reduced by 0.15 percentage points. Among them, only the five-year highest interest rate of BOC did not fall but rose, from the original 2.65% to 2.9%, and the minimum deposit amount was 5000,<> yuan.

On June 6, these banks also had a fixed deposit rate of 7% or 3.3%, and overnight, the highest fixed deposit rate for all their terms was only 05.2%, saying goodbye to the "9" word completely. Since the actual execution interest rates of major banks were not exactly the same before, there was also a difference after this adjustment.

After this reduction, if the deposit of 10,100 yuan is made for two years, the annual interest will be reduced by 200 yuan and 150 yuan in two years; For the three-year period, the interest will be reduced by 450 yuan per year, and the three-year income will be reduced by 150 yuan; The five-year interest is also reduced by 750 yuan per year, and the interest is reduced by 50 yuan at the end of the five-year period. Correspondingly, if it is a deposit of 500,1000 yuan, the annual interest of the two-year fixed deposit will be reduced by 750 yuan, and the interest will be reduced by 2250,750 yuan in two years; For the three-year period, the annual interest will be reduced by 3750 yuan, and the three-year income will be <> yuan less; The five-year interest is also reduced by <> yuan per year, and the interest is reduced by <>,<> yuan at the end of the five-year period.


Lowering the long-term fixed deposit rate can reduce the cost of bank liabilities

Data disclosed by the China Banking and Insurance Regulatory Commission showed that at the end of 2022, the overall net interest margin of commercial banks was 1.91%, down 17BP year-on-year. According to the first quarterly report of 2023, the net interest margin of 42 listed banks decreased by 25BP year-on-year, of which the average net interest margin of 27 listed small and medium-sized banks in the first quarter was 1.68%, 31BP narrower than at the beginning of the year. Net interest margin continued to narrow, which affected the revenue of some banks. In this context, lowering deposit interest rates and reducing debt costs has become the key for banks to ease the pressure on interest margins.

Dong Ximiao, chief researcher of CML, said that the growth rate of net profit of commercial banks slowed down in the first quarter of 2023, and the net interest margin showed a downward trend quarter by quarter, which is related to the continuous reduction of fees and profits by banks, but it will affect the sustainability of reducing financing costs and will also affect the bank's ability to replenish endogenous capital. Therefore, it is still necessary to reduce the deposit interest rate and reduce the cost of debt to delay the pressure of interest margin narrowing and stabilize the income level.

Wang Yifeng, chief analyst of the banking industry of Everbright Securities, said that for the head banks, because the proportion of core liabilities is higher, the drag on deposit regularization is more obvious. At present, the long-end interest rate level of core deposits is significantly higher than the market interest rate, and the necessity of adjustment under the background of deposit regularization has increased. At the same time, weaker loan demand has suppressed the pricing of newly occurring loans, and rolling repricing factors have suppressed the interest rate of existing loans. Under the joint squeeze of both ends of assets and liabilities, the pressure of narrowing the net interest margin of the banking system still exists, and the growth rate of net interest income has a further downward trend, and it is urgent for the banking system to further strengthen the control of debt costs, enhance the anti-risk ability of the banking system, and then stabilize the level of net interest income.

Xiao Feifei, chief analyst of the banking industry of CITIC Securities, also believes that the new round of deposit interest rate reduction of the bank will further ease the pressure on the debt side of the bank, and it is not ruled out that the joint stock bank and the urban and rural commercial bank will follow up and reduce the deposit interest rate according to their own operation and supply and demand, which will benefit the improvement of the industry's debt costs.

According to Dai Zhifeng, director of Zhongtai Securities Research Institute, if the interest rates on renminbi, US dollar demand and time deposits are reduced, it is expected to alleviate the cost of debt in the banking industry by more than 3.5BP.


Deposit rates are expected to remain stable after this round of cuts

Dong Ximiao pointed out that with the macroeconomic recovery and the gradual recovery of effective financing demand in 2023, the demand for funds in the banking system may be rising. Overall, deposit rates are expected to remain robust after this round of cuts. Considering that the deposit interest rate is already at a low level, and with the macroeconomic recovery and rising financing demand, the space for the future decline of the deposit interest rate is relatively limited, but in the medium and long term, the decline in the market risk-free interest rate is the general trend.

CICC Research Report believes that after this interest rate cut, the average deposit interest rate in the next 1-2 years still has about 20bp of room for further interest rate cuts (excluding this rate cut), the main logic is based on the fact that bank loan interest rates have fallen more than the low point in 2020 since 2017, while the deposit interest rate is basically flat in 2020, still about 2017bp higher than the level in 40; About 15bp is the impact of deposit regularization, and 25bp is caused by the rise in deposit interest rates. Since 2020, the "rigidity" of deposit interest rates and the decline in loan interest rates have led to a decline of 46bp in the net interest margin of banks.

The agency believes that if the deposit rate is assumed to follow the loan rate reduction, the deposit rate is expected to be reduced by 25bp back to 2017 levels. Among them, time deposits and enterprise demand deposits have more room for downward adjustment (including "innovative deposit products" such as standardized agreement deposits, call deposits, structured deposits, and Internet deposits). Under this assumption, without considering the impact of deposit demand, it is estimated that it can save about 7000 billion yuan in bank debt costs, and positively contribute 17bp/8%/16% to the net interest margin/revenue/net profit of listed banks.

Zhongtai Securities said that after the reduction of large banks, follow-up small and medium-sized banks may carry out follow-up to varying degrees, which will help reduce the pressure on the debt side of the industry as a whole. Although there are many types of cuts involved this time, the range is relatively small, and there is still room for the deposit interest rate to fall. Text/Reporter Cheng Jie Coordinator/Yu Meiying Photo courtesy of Visual China

Execution rate reduction


For exclusive deposits for new citizens or individual pensions, the 5-year fixed deposit interest rate can reach up to 3.05%, and now it is reduced to 2.90%; The ordinary 5-year fixed deposit rate, which was previously up to 2.65%, has now been reduced to 2.50%; The 3-year fixed deposit rate, which was previously up to 3%, has now been reduced to 2.85%; The 2-year CDB rate, which previously peaked at 2.4%, is now 2.3%.


The five-year period was 2.50%, the three-year period was 2.85%, and the two-year period was 2.2%, which was 30.0, 1.0 and 15.0 percentage points lower than before, respectively.


The 2-year and 3-year top interest rates were previously 2.4% and 3%, respectively, and are now 2.3% and 2.85%. The maximum interest rate for the 5-year period increased to 2.65% from 2.9% previously, with a minimum deposit amount of 5000,<> yuan.

Bank of Communication

The maximum executable interest rates for 2-year, 3-year and 5-year terms were lowered to 2.15%, 2.60% and 2.65% respectively from 2.05%, 2.45% and 2.50% previously.


A 3-year product for specific customers starts at 5000,2 yuan with an interest rate of 85.2%; A 5000-year product for specific customers starts at 2,30 yuan with an interest rate of 2023.12% and the sales deadline is December 31, <>.

Postal Savings Bank

The interest rate of the 2-year lump sum deposit agreement can reach up to 2.3%, and the minimum deposit is 1,3 yuan; The interest rate of the 2-year agreement is up to 8.50%, and the deposit starts at 5,2; The 5-year CDR has only a listed interest rate, which is <>.<>% regardless of the amount deposited.