Core Viewpoint - The recent increase in service fees by over 10 banks in the first half of 2025 is a response to the narrowing net interest margin and aims to enhance revenue sources and profitability [1][2] Group 1: Reasons for Fee Increases - The continuous narrowing of net interest margins has compelled banks to seek new revenue sources to improve profitability and risk resilience, with the net interest margin reported at 1.43% at the end of Q1, down 11 basis points year-on-year [1] - Banks are adjusting service fees to improve cost coverage and enhance equipment utilization efficiency [1] - The expansion of free services during the COVID-19 pandemic has increased pressure on net interest margins, prompting banks to optimize their service fee structures to ensure sustainable development [1] Group 2: Regulatory and Consumer Considerations - The adjustments in service fees align with the 2014 regulations allowing banks to set market-adjusted prices autonomously, while also respecting consumers' rights to information and choice [2] - Banks must communicate effectively with customers regarding the basis for fees and the value of services to avoid customer dissatisfaction and potential loss [2] - A careful balance must be struck between profit growth and customer satisfaction to mitigate negative social impacts from fee adjustments [2] Group 3: Long-term Strategies for Sustainability - Relying solely on new fees for income is not a sustainable long-term strategy; banks must focus on economic transformation and enhancing core competitiveness [3] - Smaller banks should leverage their unique characteristics and market positioning to offer customized financial products and services, creating competitive advantages [3] - There is a need for banks to accelerate digital transformation and improve operational efficiency to reduce costs and enhance customer experience [3]

Core Viewpoint - The decline in the issuance of medium- and long-term large-denomination certificates of deposit (CDs) reflects banks' proactive adjustments in their liability management strategies amid pressure on net interest margins [1][3][5]. Summary by Sections Changes in Large-Denomination CDs - Many national banks have stopped issuing medium- and long-term large-denomination CDs, with the longest available term now being two years, and the interest rates for two-year CDs being the same as for one-year CDs at 1.4% [1][2]. - The interest rates for large-denomination CDs have become comparable to those of regular fixed-term deposits, diminishing their appeal [2][3]. Impact of Low-Interest Rates - The low-interest environment is forcing banks to reshape their deposit strategies and liability structures, shifting focus from scale to quality and efficiency [4][5]. - Banks are increasingly converting medium- and long-term deposits into short-term deposits to manage costs effectively [3][4]. Net Interest Margin Pressure - The net interest margin for commercial banks in China was reported at 1.43% in Q1 2025, a decrease of 9 basis points from Q4 2024, indicating ongoing pressure on profitability [3][4]. - Different types of banks, including state-owned and joint-stock banks, have experienced varying degrees of decline in net interest margins, with some facing significant challenges in maintaining profitability [3][4]. Shift in Deposit Strategies - Regional small and medium-sized banks are rapidly adjusting their deposit rates, sometimes lowering them below those of larger banks, indicating a shift in competitive dynamics [4][5]. - Banks are focusing on optimizing their deposit structures by increasing short-term deposits and reducing reliance on high-cost liabilities [5][6]. Future Trends in Deposits - There is an expectation that funds will flow towards non-bank financial products, the real economy, and potentially back to smaller banks due to their delayed rate adjustments [6][7]. - Investors are encouraged to reconsider traditional reliance on deposits and explore diversified investment strategies to enhance long-term returns [7].

Core Viewpoint - The article discusses the declining availability and interest rates of large-denomination time deposits in China, highlighting a shift in the banking sector's focus towards high-net-worth clients and the impact of market interest rate changes on deposit products [2][4][16]. Summary by Sections Availability of Large-Denomination Time Deposits - Many banks, including major state-owned and joint-stock banks, have removed five-year and some three-year large-denomination time deposit products from their offerings, now primarily providing two-year options [2][7]. - For example, Industrial and Commercial Bank of China has no five-year large-denomination time deposits available, with one-year and two-year rates at 1.2% and three-year rates at 1.55% respectively [3][10]. Interest Rate Trends - The majority of banks have seen their maximum annualized interest rates for large-denomination time deposits drop to the 1% range, with some banks offering rates as low as 0.9% for one-month deposits, which are now lower than many money market funds [4][6][11]. - The three-year large-denomination time deposit rates have decreased by approximately 80 basis points compared to the previous year, reflecting a broader trend of declining deposit rates in response to market conditions [15][16]. Market Dynamics and Client Focus - In the current environment, banks are focusing on managing their liability costs and optimizing client structures, with a notable shift towards serving high-net-worth clients [5][17]. - The article notes that some banks are promoting the transfer of existing high-rate large-denomination time deposits as a strategy to attract clients seeking better returns [13]. Regional Variations in Rates - There are discrepancies in interest rates for the same large-denomination time deposit products across different regions, indicating a localized approach to deposit pricing [14][19]. Competitive Landscape - The competition among banks has intensified, leading to a reduction in deposit interest rates as banks seek to lower their funding costs while still growing their deposit bases [18][19].

Core Viewpoint - The recent trend of major banks in China, including Industrial and Commercial Bank of China, Agricultural Bank of China, and others, has been to phase out long-term large-denomination certificates of deposit (CDs) in response to the ongoing narrowing of net interest margins, indicating a strategic shift towards more sustainable liability structures [1][4]. Group 1: Market Changes - Many banks have removed five-year and even three-year large-denomination CDs from their offerings, with some banks now only providing products with a maximum term of two years [1][2]. - The average interest rate for three-year large-denomination CDs has dropped significantly from 2.197% to 1.55%, leading to a reduction in interest income for depositors [2][3]. Group 2: Interest Rate Trends - The interest rates for large-denomination CDs have entered a "1 era," with rates for two-year and one-year CDs generally around 1.20% and 1.55% for three-year CDs, reflecting a broader trend of declining rates [3][4]. - The current interest rates for two-year and shorter large-denomination CDs are concentrated between 0.9% and 1.4%, while five-year products have largely disappeared from the market [3]. Group 3: Strategic Responses - Banks are actively reducing the scale of long-term liabilities to avoid the risk of cost-revenue inversion, which is a direct response to the pressure on net interest margins [1][4]. - The net interest margin for Chinese commercial banks is projected to decline further, with a reported drop to 1.43% in the first quarter of 2025, highlighting the ongoing challenges faced by the banking sector [4].

Core Viewpoint - The availability of high-yield large-denomination certificates of deposit (CDs) is decreasing, with many banks no longer offering products with longer maturities, and the interest rates have entered the 1% era for most banks [1][2]. Group 1: Availability of Large-Denomination CDs - Many banks, including major state-owned and joint-stock banks, have removed five-year and some three-year large-denomination CDs from their offerings, now only providing up to two-year products [1][2]. - The interest rates for large-denomination CDs have significantly decreased, with most banks offering rates below those of money market funds [4][2]. Group 2: Interest Rate Comparison - The annualized interest rates for large-denomination CDs vary by bank size and type, with major banks offering rates as low as 0.9% for one-month CDs and 1.55% for three-year CDs, while some private banks offer rates as high as 2.3% for three-year CDs [3][6]. - The average annualized interest rate for listed banks' deposit rates has decreased to 1.82% in 2024, down 15 basis points from 2023 [9]. Group 3: Market Trends and Strategies - In response to declining interest rates, banks are focusing on optimizing their liability structures and shifting resources towards high-net-worth clients [6][9]. - The trend of transferring high-yield large-denomination CDs is gaining traction, with clients seeking to acquire older CDs with better rates through transfer zones [5][6]. Group 4: Regional Rate Discrepancies - There are notable regional differences in the interest rates for the same large-denomination CD products, with variations observed across cities such as Shanghai, Zhejiang, and Jiangsu [6][9]. Group 5: Impact of Regulatory Changes - The continuous decline in the interest rates for large-denomination CDs is a result of the market-oriented interest rate reforms and the reduction of the Loan Prime Rate (LPR) [6][8]. - The net interest margin for banks has narrowed, with the average margin dropping to 1.43% in the first quarter of 2025, down from 1.54% in the previous year [6][8].

Core Viewpoint - The recent scarcity of long-term large-denomination certificates of deposit (CDs) in Chinese banks reflects a strategic shift in response to narrowing net interest margins and rising funding costs, prompting banks to limit high-cost deposit products and encouraging investors to reconsider traditional deposit reliance [1][3][4][5]. Group 1: Market Trends - Long-term large-denomination CDs, particularly 5-year products, have become increasingly difficult to find, with many banks ceasing to offer them [2][3]. - As of June 10, 2023, major state-owned banks have reduced the interest rates on 1-year and 2-year large-denomination CDs to 1.2%, and 3-year products to 1.55%, with no 5-year CDs available [2][3]. - The trend of banks discontinuing long-term large-denomination CDs has been observed since early 2024, indicating a proactive strategy to manage liabilities amid declining net interest margins [3][4]. Group 2: Financial Implications - The net interest margin for Chinese commercial banks fell to 1.43% in Q1 2025, a decrease of 9 basis points from Q4 2024, highlighting the pressure on banks to manage funding costs [4]. - The shift towards shorter-term deposits and alternative financial products, such as short-term wealth management and structured deposits, is becoming more prevalent as banks seek to attract funds while minimizing interest expenses [5][6]. Group 3: Investor Recommendations - Investors are advised to adjust their traditional reliance on deposits, as the overall deposit rates have entered the "1 era," which may lead to returns lagging behind inflation [8]. - It is suggested that investors consider diversifying their portfolios by including low-risk assets like government bonds and short-term bond funds, or adopting a "deposit + insurance + wealth management" strategy to balance liquidity and returns [8]. - For those with higher risk tolerance, a "fixed income +" strategy that includes equity assets may enhance long-term returns [8].

Core Viewpoint - Recent adjustments in deposit interest rates by small and medium-sized banks have led to a notable decline in long-term deposit rates, with some institutions offering five-year fixed deposit rates as low as 1.2%, which is below the state-owned banks' rates of 1.3% for the same period [1][2]. Group 1: Rate Adjustments - Several rural commercial banks and village banks have announced reductions in their fixed deposit rates, with Guangdong Qingxin Rural Commercial Bank lowering its five-year rate to 1.25% and Guangzhou Huadu Chouzhou Village Bank to 1.2% [2]. - The adjustments in small and medium-sized banks contrast sharply with the collective rate cuts by state-owned banks, which reduced their three-month to two-year rates by 15 basis points and five-year rates by 25 basis points [2][3]. Group 2: Market Dynamics - The decline in long-term deposit rates among small and medium-sized banks is attributed to a combination of narrowing net interest margins, maturity mismatch risks, and the transmission of policy changes [3][4]. - The net interest margin for commercial banks in China has decreased to 1.43% in the first quarter of this year, indicating pressure on profitability [4]. Group 3: Future Trends - The phenomenon of inverted interest rates, where short-term rates are higher than long-term rates, is expected to persist in the short term due to ongoing net interest margin pressures [4][5]. - Small and medium-sized banks are likely to adopt a pricing strategy that favors higher short-term rates while suppressing long-term rates to attract liquidity-sensitive customers [4][5]. Group 4: Strategic Recommendations - To address the challenges posed by the current interest rate environment, small and medium-sized banks are encouraged to implement differentiated pricing strategies, innovate deposit services, and accelerate digital transformation [5][6]. - Enhancing strategic research capabilities and refining deposit pricing strategies are essential for improving customer retention and managing funding costs effectively [5][6].

Group 1 - The core viewpoint of the articles is that a new wave of interest rate cuts is sweeping through the banking industry, initiated by the People's Bank of China, with significant adjustments made by major state-owned banks and other financial institutions [2][3][6] - On May 20, 2025, major state-owned banks lowered their deposit rates, with the one-year deposit rate falling below 1%, and the adjustment range for fixed-term deposits varying from 0.15 to 0.25 percentage points [2][3] - Despite the overall trend of rate cuts, Yilian Bank reportedly raised its one-year fixed deposit rate from 1.85% to 2.00% on May 21, 2025, although this claim was later disputed as the bank's official website showed the rate remained at 1.85% [1][4][5] Group 2 - The net interest margin of commercial banks in China narrowed to 1.43% in Q1 2025, a decrease of 9 basis points from the previous quarter, indicating pressure on bank profitability [3][6] - Analysts predict that the overall interest margin for banks may decline by 10 to 15 basis points throughout 2025 due to the combination of LPR cuts and lower funding costs [3][6] - Some smaller banks, like Blue Ocean Bank, have also attempted to raise deposit rates in 2025, indicating a strategy to attract funds amid a competitive environment [6][7] Group 3 - The trend of interest rate adjustments reflects a broader strategy among banks to manage their funding costs and attract deposits, particularly in a low-interest-rate environment [2][6] - Analysts suggest that small and medium-sized banks should focus on niche markets and enhance service quality to differentiate themselves in a competitive landscape [7]

Core Viewpoint - The banking industry is transitioning into a low-interest-rate environment, which poses significant challenges for profitability and requires a strategic shift from a focus on asset scale to value-driven growth [3][4][6]. Summary by Sections Low-Interest Rate Era - The recent decline in LPR rates indicates a shift towards a low-interest-rate era in China, with net interest margins decreasing from 2.08% in 2021 to 1.43% in Q1 2025, a drop of 65 basis points [3][8]. - Historical experiences from Japan, the US, and Europe suggest that once a country enters a low-interest-rate environment, it may take over a decade to exit [7][8]. International Experience and Strategies - Japanese banks have successfully navigated low-interest rates through international expansion and diversification of non-interest income, providing a model for Chinese banks [4][11]. - Key strategies employed by Japanese banks include expanding overseas operations, adjusting loan structures, enhancing non-interest income, and pursuing mergers and acquisitions [12][13]. Domestic Banking Response - Chinese banks are adopting a combination of strategies to cope with the low-interest-rate environment, focusing on both increasing non-interest income and optimizing cost structures [18][20]. - Major banks like ICBC are emphasizing internationalization and comprehensive service offerings to support revenue growth, with international assets contributing 11.8% to the group's total [16][20]. Transformation and Future Outlook - The banking sector is moving from a reliance on interest income to a diversified income model, with a focus on wealth management and comprehensive financial services [21][22]. - Smaller banks are also adapting by deepening regional market engagement and offering tailored financial products to enhance customer loyalty [22]. Conclusion - The transition to a low-interest-rate environment necessitates a fundamental transformation in the banking industry, emphasizing strategic execution and the development of a multi-faceted income structure to ensure sustainable growth [15][22].

5月20日起，多家国有大行及部分股份行再度下调人民币存款挂牌利率，此次调整涉及活期存款、定期存款和通知存款等多种产品类型。 中国建设银行于5月20日下调了人民币存款利率，其中活期利率下调5个基点至0.05%；定期整存整取三个月期、半年期、一年期、二年期均下调15个基点， 分别为0.65%、0.85%、0.95%、1.05%；三年期和五年期均下调25个基点，分别至1.25%和1.3%。定期零存整取、整存零取、存本取息三种期限均下跌15个基 点。7天期通知存款利率下调15个基点至0.3%。 招商银行下调人民币存款利率，其中活期利率下调5个基点至0.05%；定期整存整取三个月期、半年期、一年期、二年期均下调15个基点，分别为0.65%、 0.85%、0.95%、1.05%；定期整存整取三年期和五年期均下调25个基点，分别至1.25%和1.3%。定期零存整取、整存零取、存本取息三种期限均下跌15个基 点。7天期通知存款利率下调15个基点至0.3%。 此次存款利率下调在预期之中。5月7日，人民银行行长潘功胜在国新办新闻发布会上宣布下调政策利率0.1个百分点，经过市场化利率传导，预计将带动贷 款市场报价利率（LPR）随之 ...