Jin Rong Shi Bao·2025-12-02 07:16Core Viewpoint - The major state-owned banks in China have completely stopped offering 5-year large denomination certificates of deposit (CDs), leading to a significant reduction in the availability of long-term deposit products in the market [1][2][6]. Group 1: Bank Actions - Six major state-owned banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China, have ceased the sale of 5-year large denomination CDs [1][2]. - The remaining available terms for large denomination CDs have shifted to shorter durations, with the longest being 3 years, which has a rate of 1.55% [2][6]. - The trend of discontinuing long-term deposit products is not limited to national banks; local commercial banks and private banks are also following suit, as seen with the announcements from banks in Inner Mongolia [10][11]. Group 2: Market Dynamics - The withdrawal of 5-year CDs is attributed to the current downward trend in interest rates, which discourages banks from offering higher rates for long-term deposits [10]. - There is a notable increase in the overall deposit scale due to high savings enthusiasm among residents, while the demand for loans remains weak, leading banks to be less inclined to attract long-term deposits [10]. - Many banks are also reducing deposit rates, with some institutions cutting rates by as much as 65 basis points, reflecting a broader strategy to optimize their liability structure under pressure from interest margins [10][11]. Group 3: Investor Sentiment - The reduction in long-term deposit products has created a dilemma for ordinary depositors, as they struggle to find stable investment options [11]. - A survey indicates a slight decline in the proportion of depositors preferring to save more, suggesting a shift in asset allocation strategies among investors in a low-interest-rate environment [11]. - Financial experts recommend that investors adjust their expectations for returns and consider diversifying their asset allocation to include cash management products, money market funds, and government bonds [11]. Group 4: Industry Implications - The decline of long-term deposit products is prompting banks to accelerate their transformation efforts, focusing on wealth management and custodial services to stabilize non-interest income [11]. - Banks are encouraged to enhance their strategies on both asset and liability sides to maintain net interest margins amidst changing market conditions [11].