Zhong Guo Zheng Quan Bao·2025-10-21 23:21Core Viewpoint - Recent adjustments in deposit interest rates by several small and medium-sized banks indicate a trend towards lowering rates, particularly for long-term deposits, to optimize liability structures and manage funding costs amid a declining interest rate environment [1][5][6] Group 1: Deposit Rate Adjustments - Suzhou Bank plans to lower its three-year deposit rate by 10 basis points to 2.1% starting October 22, with new customers still eligible for a 2.2% rate [1][2] - Other regional banks, such as Pingyang Pudong Development Village Bank and Fujian Huato Bank, have also announced significant reductions in deposit rates, with some long-term rates dropping by as much as 80 basis points [2][3] - The frequency of rate adjustments has increased, with some banks like Huixian Zhujiang Village Bank making multiple changes within a short period [3] Group 2: Interest Rate Inversion - A notable phenomenon of interest rate inversion is emerging, where short-term deposit rates exceed long-term rates across various banking institutions [4] - For instance, China Construction Bank offers a three-year deposit rate of 1.55%, while the five-year rate is lower at 1.3% [4] - This inversion is prevalent among state-owned banks, joint-stock banks, and rural commercial banks, indicating a broader trend in the banking sector [4] Group 3: Factors Influencing Rate Changes - Industry experts attribute the inversion of deposit rates to expectations of further interest rate declines and the need for banks to adjust their liability structures [5][6] - The pressure on the liability side is prompting banks to lower long-term deposit rates to reduce funding costs and improve their financial stability [5] - Analysts predict that the central bank may implement further interest rate cuts, which could compel banks to continue lowering deposit rates to manage their interest margins [6]