Core Viewpoint - The article discusses the ongoing decline in deposit interest rates in China, highlighting the inversion of interest rates between different deposit terms and the implications for banks' funding strategies [4][5][8]. Deposit Rate Trends - As of September 2025, the average interest rates for various deposit terms are as follows: 3-month at 0.944%, 6-month at 1.147%, 1-year at 1.277%, 2-year at 1.367%, 3-year at 1.688%, and 5-year at 1.519% [6][8]. - The rates have shown a downward trend, with the 3-year rate being higher than the 5-year rate, indicating a persistent inversion in the interest rates [5][9]. Market Reactions and Expectations - The decline in deposit rates is anticipated by the market, primarily due to the continuous pressure on net interest margins, which have decreased from 1.52% at the end of last year to 1.42% by the end of the second quarter of this year [8][9]. - Analysts suggest that banks are likely to continue adjusting deposit rates downward to optimize their funding structures and manage the costs associated with long-term deposits [10]. Large Denomination Certificates of Deposit (CDs) - The interest rate advantage of large denomination CDs is diminishing, with average rates for various terms in September 2025 being: 3-month at 1.134%, 6-month at 1.318%, 1-year at 1.394%, 2-year at 1.356%, 3-year at 1.729%, and 5-year at 1.610% [12]. - The rates for one-year and longer-term large denomination CDs are becoming comparable to regular deposit rates, indicating a narrowing of the interest rate spread [12]. Structural Deposit Products - The average term for structured deposits has increased to 106 days, with an average expected middle yield of 1.59% and an expected maximum yield of 2.09% [13]. - Different types of banks show varying trends in structured deposit yields, with state-owned banks offering a higher average expected maximum yield compared to joint-stock banks [13][14]. Conclusion - The overall trend indicates a continued downward pressure on deposit rates, with banks likely to maintain a strategy of encouraging short-term deposits over long-term ones to manage their funding costs effectively [10][12].

Group 1 - The average deposit rates for various terms have continued to decline, with the 3-month rate at 0.944%, 6-month at 1.147%, 1-year at 1.277%, 2-year at 1.367%, 3-year at 1.688%, and 5-year at 1.519% as of September 2025 [1][2] - The decline in deposit rates is attributed to ongoing pressure on net interest margins, which have decreased from 1.52% at the end of last year to 1.42% by the end of the second quarter of this year [3] - The phenomenon of inverted yield curves between short-term and long-term deposit rates remains significant, with the 3-year average rate exceeding the 5-year rate [3][4] Group 2 - The average rates for large-denomination certificates of deposit (CDs) have also shown a mixed trend, with the 3-month rate at 1.134%, 6-month at 1.318%, and 1-year at 1.394% [5][6] - The average expected middle yield for structured deposits has decreased to 1.59%, while the average expected maximum yield has increased to 2.09% [6][7] - The average term for structured deposits has increased across different types of banks, with foreign banks showing the longest average term of 405 days [6][7]

Core Viewpoint - The article discusses the continuous decline in deposit interest rates in China, highlighting the pressure on net interest margins and the phenomenon of inverted interest rates between short-term and long-term deposits [1][4]. Deposit Interest Rates - As of September 2025, the average interest rates for various deposit terms are as follows: 3-month at 0.944%, 6-month at 1.147%, 1-year at 1.277%, 2-year at 1.367%, 3-year at 1.688%, and 5-year at 1.519% [1][2]. - Compared to the previous month, the rates have decreased slightly across all terms, with the 3-year term seeing a decline of 0.4 basis points [1][2]. Net Interest Margin Pressure - The net interest margin for commercial banks has been on a downward trend, recorded at 1.52% at the end of last year, 1.43% at the end of Q1, and 1.42% at the end of Q2 this year [4]. - The decline in deposit rates is seen as a response to the ongoing pressure on net interest margins, with banks adjusting rates to manage costs associated with long-term deposits [4][5]. Inverted Interest Rates - The article notes a significant inversion in interest rates, where the average interest rate for 3-year deposits (1.688%) is higher than that for 5-year deposits (1.519%) [4][5]. - This inversion has been a recurring theme since 2024, indicating a shift in depositor behavior and banks' strategies to encourage shorter-term deposits [5]. Large Time Deposits - The interest rate advantage of large time deposits is diminishing, with average rates for various terms in September 2025 showing mixed changes [7]. - For instance, the 3-month large time deposit rate is at 1.134%, while the 1-year rate is at 1.394%, indicating a narrowing gap between large time deposits and regular deposits [7]. Structural Deposits - The average term for structured deposits has increased, with the average term for RMB structured deposits at 106 days, up 5 days from the previous month [8]. - The average expected middle yield for structured deposits is 1.59%, reflecting a slight decrease, while the average expected maximum yield is 2.09%, showing a small increase [8][9]. Conclusion - Overall, the article emphasizes the ongoing downward trend in deposit interest rates, the challenges posed by net interest margin pressures, and the implications of inverted interest rates on banking strategies [1][4][5].

Core Viewpoint - The average deposit rates in China continue to decline, with significant pressure on net interest margins, leading to a persistent inversion in long-term and short-term deposit rates [1][4][5]. Deposit Rate Trends - As of September 2025, the average deposit rates for various terms are as follows: 3-month at 0.944%, 6-month at 1.147%, 1-year at 1.277%, 2-year at 1.367%, 3-year at 1.688%, and 5-year at 1.519% [1][3]. - Compared to the previous month, the rates have decreased slightly across all terms, with the most significant drop being 0.4 basis points for the 3-year term [1][3]. Net Interest Margin Pressure - The net interest margin for commercial banks has been on a downward trend, recorded at 1.52% at the end of last year, 1.43% at the end of Q1, and 1.42% at the end of Q2 this year [4]. - The continuous decline in deposit rates is attributed to the ongoing pressure on net interest margins, which has led banks to adjust their deposit pricing strategies [4][5]. Long-term vs Short-term Rate Inversion - A notable phenomenon is the inversion of average rates between 3-year and 5-year deposits, with the 3-year rate at 1.688% being higher than the 5-year rate at 1.519% [1][4]. - This inversion has been persistent since 2024, indicating a shift in depositor behavior towards shorter-term deposits [5]. Large-denomination Certificate of Deposit (CD) Trends - The average rates for large-denomination CDs have also shown mixed trends, with the 3-month rate at 1.134%, 6-month at 1.318%, and 1-year at 1.394% [6][7]. - The rate differences between large-denomination CDs and regular deposits are narrowing, particularly for terms longer than one year [7]. Structural Deposit Insights - The average term for structured deposits has increased to 106 days, with a slight decrease in average expected middle yield to 1.59% [7][8]. - Different types of banks show varying trends in structured deposit terms and yields, with foreign banks having the longest average term at 405 days and the highest expected yield at 4.35% [7][8].

Core Viewpoint - Multiple regional small and medium-sized banks in China have recently announced significant reductions in various deposit interest rates, indicating a trend to stabilize net interest margins amid a declining interest rate environment [1][2][5]. Group 1: Deposit Rate Adjustments - Pingyang Pudong Rural Bank announced a new round of deposit rate adjustments effective from October 21, with reductions of 40 to 80 basis points across various fixed-term deposit products [1]. - Shantou Bay Rural Commercial Bank also reduced its fixed-term deposit rates effective October 18, with annualized rates adjusted to between 0.95% and 1.80%, reflecting a decrease of 15 to 20 basis points [2][4]. - Other banks, including Jiangsu Su Commercial Bank and Shanghai Huari Bank, have also joined the trend of lowering deposit rates, with specific reductions planned for October 22 and October 13, respectively [5]. Group 2: Market Context and Implications - The recent adjustments in deposit rates are primarily driven by the decline in the Loan Prime Rate (LPR), with larger state-owned banks having already reduced their deposit rates [5]. - Analysts suggest that the ongoing pressure on net interest margins for small and medium-sized banks necessitates these rate cuts to manage liability costs effectively [6]. - The overall trend indicates that banks are likely to continue lowering deposit rates, which may provide room for future monetary easing and potentially lead to a 10 basis points rate cut in the fourth quarter [6].

Group 1 - A new round of deposit rate cuts has begun among regional small and medium-sized banks, with over 10 banks announcing reductions since October [1][4] - The largest cut observed was 80 basis points for certain term deposits, with specific banks like Pingyang Pudong Village Bank adjusting rates for various terms [1][4] - The adjustments primarily affect fixed-term deposits, with some banks also reducing rates for demand deposits and agreement deposits [2][4] Group 2 - The recent cuts in deposit rates are directly linked to the previous reductions in the Loan Prime Rate (LPR) by major state-owned banks, indicating a follow-up action by smaller banks [5] - Analysts suggest that the ongoing decline in loan rates necessitates adjustments in the asset-liability structure of small banks to manage net interest margin pressures [5] - Future expectations indicate that deposit rates may continue to decline, potentially easing the pressure on banks' net interest margins and paving the way for monetary easing [5]

Core Viewpoint - Regional banks have initiated a new round of deposit rate cuts in the fourth quarter, with over ten banks announcing reductions since October, primarily affecting fixed-term deposits [1][2]. Group 1: Deposit Rate Adjustments - The current round of rate cuts is mainly focused on fixed-term deposits, with the largest reduction reaching 80 basis points [2]. - Pingyang Pudong Village Bank announced that starting October 21, various fixed-term deposit rates will be adjusted downwards, with reductions of 40, 35, 35, 50, 80, and 80 basis points for terms of three months, six months, one year, two years, three years, and five years respectively [2]. - Shantou Bay Agricultural Commercial Bank adjusted its fixed-term deposit rates for various terms, reducing them by 15 to 20 basis points [2]. Group 2: Reasons for Rate Cuts - The primary reason for the deposit rate cuts is the decrease in the Loan Prime Rate (LPR), with regional banks following the lead of state-owned banks that previously reduced their deposit rates [3]. - Analysts suggest that the adjustments in deposit rates are necessary for regional banks to manage their asset-liability structures and address net interest margin pressures [3]. - Future expectations indicate that the rates on existing deposits will decline more rapidly due to the re-pricing of high-interest deposits and increased deposit activity, which may alleviate the narrowing of banks' net interest margins and create space for future monetary easing [3].

Core Viewpoint - Regional small and medium-sized banks have initiated a new round of deposit rate cuts in the fourth quarter, following a trend set by larger banks [1][3]. Group 1: Deposit Rate Adjustments - Over 10 small and medium-sized banks have announced reductions in deposit rates since October, including Pingyang Pudong Village Bank and Shantou Bay Agricultural Commercial Bank [1]. - Jiangsu Sushang Bank and Shanghai Huari Bank have also joined the trend, with Shanghai Huari Bank reducing its three-year fixed deposit rate from 2.3% to 2.15%, a decrease of 15 basis points [1]. Group 2: Rate Cut Magnitudes - The current round of rate adjustments primarily affects fixed deposits, with the largest cut reaching 80 basis points. For instance, Pingyang Pudong Village Bank has reduced rates across various terms, with the three-year rate cut by 80 basis points [2]. - Shantou Bay Agricultural Commercial Bank has adjusted its fixed deposit rates for various terms, with reductions ranging from 15 to 20 basis points [2]. Group 3: Market Context and Implications - The primary reason for these rate cuts is the decrease in the Loan Prime Rate (LPR), which has prompted smaller banks to follow suit after larger banks made similar adjustments [3]. - Analysts suggest that the decline in deposit rates will help alleviate the pressure on net interest margins for banks, potentially paving the way for future monetary easing [3].

Core Viewpoint - The recent trend of banks lowering deposit interest rates has become a norm, particularly among small and medium-sized banks, with significant cuts in long-term deposit rates, driven by strong market expectations for future interest rate reductions [1][4]. Group 1: Deposit Rate Adjustments - Multiple banks, especially small and medium-sized ones, have recently lowered their deposit rates, with the most significant reductions seen in long-term deposits, particularly three-year and five-year terms, with cuts ranging from 15 to 40 basis points [1][4]. - Shanghai Huari Bank announced a reduction in its three-year fixed deposit rate from 2.3% to 2.15%, marking its seventh rate cut this year [3]. - Other banks, such as Tianjin Jincheng Bank and Henan Luoyang Rural Commercial Bank, have also adjusted their deposit rates, with some reductions reaching up to 35 basis points [3][4]. Group 2: Net Interest Margin Pressure - The continuous narrowing of net interest margins is pressuring banks to lower deposit rates to alleviate costs on the liability side [5][7]. - Data from the National Financial Regulatory Administration shows that commercial banks' net interest margins have decreased from 1.52% at the end of last year to 1.42% by the end of the second quarter this year [7]. Group 3: Long-Short Rate Inversion - A notable phenomenon is the frequent occurrence of long-short rate inversion, where long-term deposit rates are lower than short-term rates, contrary to typical expectations [6][8]. - For instance, Shanghai Huari Bank's three-year deposit rate is 2.15%, while its five-year rate is slightly lower at 2.1% [8]. - Analysts suggest that banks are intentionally guiding depositors towards shorter-term deposits to manage the pressure from high-interest long-term deposits maturing in 2025 [8].

Core Viewpoint - The recent trend of banks lowering deposit interest rates has become a norm, particularly among small and medium-sized banks, with significant reductions in long-term deposit rates due to strong market expectations for future interest rate cuts [1][5]. Group 1: Deposit Rate Adjustments - Multiple banks, especially small and medium-sized ones, have recently announced reductions in deposit rates, with the most significant cuts observed in three-year and five-year deposit rates, decreasing by 15 to 40 basis points [1][3]. - Shanghai Huari Bank reduced its three-year fixed deposit rate from 2.3% to 2.15%, marking its seventh rate cut this year, with similar actions taken by other small banks [3][4]. - The overall trend shows that national banks have seen their three-year and five-year fixed deposit rates drop to the 2% range, with some even falling to the 1% range [5][6]. Group 2: Reasons for Rate Cuts - The primary reasons for the recent deposit rate cuts include the need to address net interest margin pressures and the desire of small banks to narrow the gap in funding costs compared to larger banks [5][6]. - Analysts suggest that the continuous narrowing of net interest margins has compelled small banks to lower deposit rates to alleviate funding costs [5][6]. Group 3: Interest Rate Inversion - A notable phenomenon is the frequent occurrence of interest rate inversion, where long-term deposit rates are lower than short-term rates, contrary to typical expectations [7]. - For instance, Shanghai Huari Bank's three-year deposit rate is 2.15%, while the five-year rate is slightly lower at 2.1%, indicating this inversion trend [7]. - Analysts believe that banks are strategically lowering long-term deposit rates to optimize their liability structure and manage the costs associated with long-term deposits [7].