Chang Sha Wan Bao·2025-06-03 03:19Core Viewpoint - The recent trend of banks discontinuing long-term large-denomination certificates of deposit (CDs) is primarily driven by the need to reduce funding costs and manage net interest margin pressures in a declining interest rate environment [5][6]. Group 1: Discontinuation of Long-term Large-denomination CDs - Minsheng Bank has stopped offering large-denomination CDs with a maturity of six months or more, now only providing one-month and three-month options at a rate of 1.7% [1]. - Other banks, such as China Merchants Bank, have also ceased issuing three-year and five-year large-denomination CDs, indicating a broader trend among banks [1][2]. - The availability of five-year large-denomination CDs has significantly decreased, with many banks reporting that such products are sold out [2]. Group 2: Market Conditions and Customer Sentiment - Customers are expressing frustration over the scarcity of long-term large-denomination CDs, with reports of lower interest rates compared to previous offerings [2]. - Major banks like ICBC have seen their two-year and three-year large-denomination CDs sold out, while higher denomination options remain available at a rate of 2.35% [2]. - The trend of banks discontinuing high-yield deposit products is evident, with many regional banks also announcing the removal of innovative high-interest deposit products [3]. Group 3: Reasons Behind the Shift - Banks are reducing high-cost deposit products like large-denomination CDs to lower their funding costs and mitigate the pressure on net interest margins, which have declined to 1.69% as of the end of 2023 [5][6]. - The interest rates for large-denomination CDs have decreased significantly, with three-year and five-year rates dropping from the "3" era to the "2" era, narrowing the interest rate spread with regular fixed deposits [4][5]. - The shift in product offerings reflects a strategic balance banks are trying to achieve between lowering funding costs and attracting deposits [6]. Group 4: Future Outlook - The expectation is that deposit rates may continue to decline, with predictions of multiple rounds of rate cuts in 2024 to further reduce funding costs [7]. - Investors are advised to adjust their expectations regarding investment returns in light of the ongoing decline in deposit rates and yields from various financial products [7].