Report Summary 1. Report Industry Investment Rating No information provided. 2. Report's Core View - Macro factors include China's September LPR remaining unchanged, potential bank deposit - rate cuts in Q4, and various overseas trade policies such as US tariff hikes and South Korea's anti - dumping duties. Supply has been rising since mid - May, inventory has increased significantly, and costs and demand have changed. Technically, the manganese silicon main contract's weekly K - line is bearish. The market is expected to be weak after the holiday, and it is recommended to reduce or empty positions [6]. 3. Summary by Directory 3.1 Week - ly Key Points Summary - **Macro**: China's September LPR: 5 - year above at 3.5%, 1 - year at 3%. Guangdong prepared for Typhoon "Hua Jiasha". More banks may cut deposit rates in Q4. Overseas, the US will impose high tariffs on certain products from October 1, and South Korea imposed anti - dumping duties on steel products [6]. - **Supply and Demand**: Production has been rising since mid - May, inventory increased significantly. Imported manganese ore port inventory decreased by 25.3 tons, and hot metal production returned to previous levels. Inner Mongolia's spot profit is - 80 yuan/ton, and Ningxia's is - 190 yuan/ton. HeSteel Group's September silicon - manganese price is 6000 yuan/ton, down 200 yuan/ton [6]. - **Technical**: The manganese silicon main contract's weekly K - line is below the 60 - day moving average, indicating a bearish trend [6]. - **Strategy**: Before the holiday, funds reduced positions, market sentiment declined, and the sector was weak. After the holiday, prices are expected to be weak. It is recommended to reduce or empty positions [6]. 3.2 Futures and Spot Market - **Futures Market**: As of September 26, the silicon - manganese futures contract's open interest decreased by 50,300 lots to 501,000 lots, and the 5 - 1 contract spread increased by 8 points to 46. Manganese silicon warehouse receipts decreased by 4,563 to 56,113, and the manganese silicon - ferrosilicon January contract spread decreased by 8 points to 220 [12][16]. - **Spot Market**: As of September 26, Inner Mongolia's silicon - manganese spot price was 5,700 yuan/ton, down 50 yuan/ton, and the basis was - 138 yuan/ton, up 56 points [23]. 3.3 Industry Chain - **Industry**: Manganese silicon inventory increased rapidly, and production declined from its peak. The national 187 - enterprise sample's capacity utilization was 44.18%, down 1.50%. Daily production was 29,490 tons, down 335 tons. Five major steel products' silicon - manganese weekly demand was 122,484 tons, up 0.87%, and national production was 206,430 tons, down 1.12% [25]. - **Inventory**: As of September 25, the national 63 - enterprise sample's inventory was 233,800 tons, up 34,900 tons. Inner Mongolia decreased by 1,500 tons, Ningxia increased by 30,600 tons, etc. [30]. - **Upstream**: As of September 26, Tianjin Port's South32 South African semi - carbonate lump was 34.3 yuan/ton - degree, down 0.2. Ningxia and Inner Mongolia's electricity prices were flat. Imported manganese ore port inventory decreased by 25.3 tons to 427.2 tons. South African manganese ore arrivals decreased by 25%, while Australian, Gabonese, and Ghanaian arrivals increased [34][40]. - **Profit**: On September 26, the northern region's spot production cost was 5,830 yuan/ton, up 20, and the profit was - 140 yuan/ton, down 50. The southern region's cost was 6,230 yuan/ton, up 20, and the profit was - 530 yuan/ton, down 40 [44]. - **Downstream**: Daily hot metal production was 2.4236 million tons, up 13,400 tons week - on - week and 175,000 tons year - on - year. HeSteel Group's September silicon - manganese price was 6,000 yuan/ton, down 200 yuan/ton [48].

Core Viewpoint - Since September, local small and medium-sized banks have been continuously lowering deposit interest rates to alleviate net interest margin pressure and follow the lead of larger banks [1][3]. Group 1: Deposit Rate Adjustments - On September 25, several banks in Henan, including Luoyang Rural Commercial Bank, announced reductions in RMB deposit rates, with the highest cut reaching 35 basis points [2][3]. - The new rates for fixed-term deposits at Luoyang Rural Commercial Bank are now 0.75% for three months, 1.00% for six months, 1.30% for one year, and 1.35% for two years, reflecting a reduction of 15 basis points [3]. - Other banks, such as Jieyang Rural Commercial Bank and Shanghai Huarui Bank, have also lowered rates across various deposit products, indicating a broader trend among local banks to adjust rates following national banks [3]. Group 2: Retail Deposit Trends - There is a noticeable outflow of retail deposits as customers shift to investment products with higher returns, such as cash management and fixed-income bank wealth management products, which offer annual yields of 2% to 3% [2][5]. - Retail deposit growth has significantly slowed, with banks facing challenges in attracting new customers and retaining existing deposits [5][6]. - Data shows that major banks like China Merchants Bank and Ping An Bank experienced a decline in retail deposit growth rates in the first half of 2025 compared to the same period in 2024, with decreases of 3.43 and 3.73 percentage points, respectively [8]. Group 3: Wealth Management Strategies - In response to declining retail deposits, banks are focusing on expanding their wealth management services, leveraging the recent bullish trends in capital markets [9][10]. - Wealth management products, particularly those linked to equity funds, are becoming key revenue drivers for banks as they seek to retain customer assets [9]. - The "fixed income plus" product category is seen as a new pathway for banks to attract deposits in a low-interest-rate environment, highlighting the need for diversified investment options [10].

Core Viewpoint - The retail deposit growth of several listed banks has slowed down significantly, prompting banks to adjust their strategies towards wealth management to mitigate the impact of deposit outflows [1][2][5][6]. Group 1: Retail Deposit Growth Comparison - In the first half of 2025, several banks experienced a notable decline in retail deposit growth compared to the same period in 2024, with specific decreases of 3.43 percentage points for China Merchants Bank and 3.73 percentage points for Ping An Bank [1][6]. - Other banks such as Beijing Bank, Ningbo Bank, Hangzhou Bank, and Suzhou Bank also saw significant reductions in their retail deposit growth rates, with declines ranging from 4.57 to 9.88 percentage points [1][6]. Group 2: Interest Rate Adjustments - Since September, a growing number of local small and medium-sized banks have lowered their deposit interest rates, with some banks announcing reductions of up to 35 basis points [1][3]. - This trend follows a broader "rate cut wave" initiated by large state-owned banks earlier in the year, aimed at alleviating pressure on net interest margins [3][4]. Group 3: Wealth Management Strategies - In response to the noticeable outflow of retail deposits, banks are increasingly focusing on wealth management to grow their assets under management (AUM) [2][7]. - The performance of cash management and fixed-income bank wealth management products, with annual yields between 2% and 3%, has led many customers to shift their investment strategies [2][7]. - Banks are also expanding their offerings in public funds and cash management products, which are perceived as lower risk and more cost-effective compared to traditional fixed-term deposits [7].

Core Viewpoint - The report from the Bank of China Research Institute indicates that more banks are likely to lower deposit interest rates in the fourth quarter of 2025, particularly for relatively high medium- and long-term deposit rates [1] Group 1: Interest Rate Adjustments - More banks are expected to join the trend of lowering deposit interest rates in the fourth quarter [1] - The focus will be on reducing relatively high medium- and long-term deposit rates [1] Group 2: Regulatory Actions - Regulatory authorities are likely to continue correcting phenomena such as "deposit regularization" and "manual interest supplementation" [1] - These actions aim to enhance the efficiency of monetary policy transmission and guide banks in reducing funding costs [1]

Core Viewpoint - The article highlights the current trend of declining bank deposit rates, with many banks offering rates below 2%, while some private banks still provide higher rates for large time deposits, indicating a competitive landscape in the banking sector [1][2]. Group 1: Deposit Rates and Products - Many private banks, such as Huari Bank and Webank, offer large time deposits with interest rates exceeding 2%, with Huari Bank providing a 24-month deposit at 2.35% and a 3-year deposit also at 2.35% [1]. - The demand for high-interest products is strong, with limited availability and quick sales, making them popular in the secondary market [1]. - Webank has introduced a service for investors to pre-order large time deposits based on specific interest rate and term criteria, enhancing customer engagement [2]. Group 2: Challenges Faced by Private Banks - Private banks generally have higher deposit rates than traditional banks, but their competitive advantage is diminishing due to continuous interest rate cuts [2]. - The lack of physical branches and brand influence poses significant customer acquisition and deposit challenges for many private banks [2]. - There is a noticeable disparity in deposit rates among private banks, with some, like WeBank, offering lower rates comparable to state-owned banks, reflecting different operational models [2][3]. Group 3: Interest Margin and Pricing Strategies - Despite higher liability costs, private banks maintain a net interest margin that is significantly higher than other types of commercial banks, although their net interest margin has seen the largest decline among all bank categories [3]. - As of Q2 2025, the net interest margin for private banks was reported at 3.91%, down 0.04 percentage points from the previous quarter, indicating pressure on profitability [3]. - The current environment compels private banks to adopt more rational deposit pricing strategies due to difficulties in finding high-yield assets to match liabilities [3]. Group 4: Strategic Recommendations - To address increasing deposit acquisition pressure, private banks are encouraged to develop open banking ecosystems and collaborate with third-party platforms to expand customer acquisition channels [4]. - There is a need for innovation in personal finance and wealth management products to provide differentiated solutions and enhance customer loyalty [4].

Core Viewpoint - The recent half-year reports from A-share listed banks indicate a rebound in deposit growth, with total deposits reaching 213.17 trillion yuan, an increase of 16.40 trillion yuan year-on-year, representing an 8.33% growth. However, some small and medium-sized banks are experiencing a slowdown in deposit growth, with over one-third of these banks reporting a quarter-on-quarter decline in deposits [1] Group 1: Deposit Growth Trends - A-share listed banks have seen a total deposit balance of 213.17 trillion yuan, up by 16.40 trillion yuan year-on-year, marking an 8.33% increase [1] - 16 out of 42 A-share listed banks reported a quarter-on-quarter decline in deposit scale, indicating challenges faced by smaller banks [1] Group 2: Economic and Competitive Factors - The decline in deposits for small and medium-sized banks is attributed to changes in the economic and financial environment, including multiple rounds of interest rate cuts leading to a low-interest-rate era for bank deposits [1] - As of September, most banks offer three-year fixed deposit rates between 1.25% and 1.50%, and five-year rates between 1.30% and 1.55%, reducing the attractiveness of bank deposits for residents [1] - The recovery of the stock market has led residents to withdraw deposits from banks to invest in higher-yield financial products, including wealth management, stocks, and bonds [1] Group 3: Strategies for Small and Medium-sized Banks - Small and medium-sized banks need to balance deposit stability and cost control by optimizing their liability structure and reducing funding costs to enhance profitability [2] - Strategies include implementing differentiated interest rates for long-term fixed deposits and adjusting the ratio of fixed to current deposits to manage liquidity effectively [2] - Developing structured deposit products can help retain funds while offering higher returns, minimizing the outflow of deposits to other investment avenues [2] Group 4: Enhancing Service and Customer Retention - Improving service capabilities is essential for small and medium-sized banks to curb deposit outflows, which includes expanding customer outreach and enhancing service quality [3] - Banks should focus on digital financial services and wealth management to attract and retain deposits, reducing reliance on traditional lending [3] - Tailored services for different customer segments, such as corporate and individual clients, can enhance deposit stability and attract long-term funds [3] Group 5: Cost Control and Market Environment Optimization - Strengthening cost control and optimizing the deposit market environment are crucial for small and medium-sized banks [4] - Banks should manage liability quality, avoid over-reliance on high-cost funding, and reduce interest expenses through various measures [4] - Enhancing operational efficiency through digitalization and optimizing branch layouts can lower costs and improve fund utilization [4]

Core Viewpoint - The recent trend of decreasing deposit interest rates among domestic small and medium-sized banks is a response to the actions of major state-owned banks, aimed at improving profitability and enhancing the ability to withstand systemic risks [1][5]. Group 1: Deposit Rate Changes - In August 2023, several domestic small and medium-sized banks announced reductions in deposit interest rates, following similar moves by the six major state-owned banks [1]. - From 2024, deposit rates are expected to enter a downward trend, with the three-year fixed deposit rate dropping from 3.05% to 1.55%, representing a nearly 50% decrease over two years [5]. - The average annual interest income from a 100,000 yuan deposit over three years has decreased from 3,050 yuan to 1,550 yuan, a reduction of 1,500 yuan [5]. Group 2: Recommendations for Depositors - Depositors are advised to consider several strategies in response to declining interest rates, such as opting for three-year large-denomination certificates of deposit to lock in rates [6]. - It is suggested that depositors diversify their holdings by placing funds in joint-stock banks or city commercial banks, which typically offer higher rates than state-owned banks [6]. - Other investment options include structured deposits, R1-rated bank wealth management products, government bonds, and bond funds, which are considered low-risk alternatives [6]. Group 3: Emergency Fund Preparation - Depositors should maintain an emergency fund due to the low liquidity of fixed deposits, with 67.3% of fixed deposit customers having withdrawn funds early for emergencies [9]. - The current interest rate for demand deposits is only 0.05%, leading to significant potential losses if fixed deposits are withdrawn prematurely [9]. - Strategies such as the "ladder deposit method" and purchasing large-denomination certificates of deposit with transferability features are recommended to ensure liquidity [9]. Group 4: Risks of Small and Medium-Sized Banks - The risk of deposit loss is increasing as more small and medium-sized banks face bankruptcy, with 105 banks approved for dissolution in 2024 [11]. - Depositors are advised to spread their funds across multiple banks, keeping deposits below 500,000 yuan per bank to ensure full insurance coverage [11]. - It is recommended to prioritize deposits in state-owned or joint-stock banks to minimize the risk of bank failure [11]. Group 5: Market Opportunities - There are significant bubbles in both the stock and real estate markets, with high price-to-income ratios indicating potential for future corrections [14]. - Depositors are encouraged to prepare for investment opportunities in the stock and real estate markets when prices reach historical lows [14].

Core Viewpoint - The recent trend of interest rate cuts on deposits by small and medium-sized banks follows the collective reduction by major state-owned banks, aimed at controlling liability costs and responding to competitive pressures in the banking sector [1][4][7] Summary by Relevant Sections Interest Rate Cuts - Since August, nearly 20 small and medium-sized banks, including Jiangsu Bank and Shenzhou Ruifeng Village Bank, have lowered their deposit rates, with three-year and five-year fixed deposit rates generally reduced by 10 to 20 basis points, now below 2% [1][3] - Specific examples include Guangdong Chaozhou Rural Commercial Bank reducing its three-year and five-year rates to 1.3% and 1.35%, respectively, and Jilin Longtan Huayi Village Bank lowering its three-year and five-year rates to 1.75% and 1.70% [2][3] Market Response and Strategies - To alleviate deposit pressure, many banks are introducing higher-yielding large-denomination certificates of deposit (CDs), with rates reaching up to 2.3% for certain products [5][6] - The trend of lowering deposit rates is seen as a response to the competitive landscape created by state-owned banks, which have also reduced their rates, prompting smaller banks to follow suit to manage their liability costs [4][7] Recommendations for Small and Medium-Sized Banks - Experts suggest that small and medium-sized banks should optimize their liability structures, enhance customer retention through technology, and develop differentiated financial products to attract stable funding sources [8] - There is an emphasis on the need for banks to improve their asset-liability management and avoid over-reliance on high-interest deposits, which could lead to unsustainable practices [6][8]

Core Viewpoint - The article discusses the recent performance of major Chinese banks, particularly focusing on the second quarter results and the overall trends in the banking industry, highlighting a subtle cooling in the market and the challenges faced by banks in terms of profitability and net interest margins [1][3]. Group 1: Banking Performance Overview - Major banks such as ICBC, ABC, BOC, and CCB reported varying results in terms of revenue and net profit growth, with some banks experiencing declines in revenue and profit [2]. - For example, 招行 (China Merchants Bank) reported a revenue decline of 1.72% and a profit increase of 0.25%, indicating a complex financial landscape where profitability is challenged despite some growth in net profit [5][6]. Group 2: Key Challenges in the Banking Sector - The overall banking sector is experiencing a downward trend in fundamental performance, with banks' absolute earning capabilities weakening [5]. - Net interest margin remains a significant challenge, with 招行's net interest margin at approximately 1.8%, which is better than the four major banks but has narrowed compared to previous quarters [12][13]. Group 3: Interest Rates and Profitability - A decrease in deposit interest rates has both positive and negative implications; while it reduces interest costs, it also accelerates the outflow of deposits towards wealth management products [10][11]. - The average cost of deposits has dropped from 1.51% to 1.18%, significantly impacting 招行's profitability, as it saved approximately 1.9 billion from reduced interest payments [10]. Group 4: Investment and Asset Management Trends - There has been a notable increase in investments in government bonds and local government bonds, reflecting a shift in the financial landscape and government leverage [22]. - The bank's non-standard assets have significantly decreased, indicating a transformation in economic structure and financing needs [20][21]. Group 5: Wealth Management and Fund Sales - 招行's wealth management capabilities are highlighted as a competitive advantage, with a significant increase in clients and assets under management [28]. - Fund sales have surged, with代销收入 (agency sales income) increasing by 24%, although overall fund sales showed a decline, indicating a shift in market dynamics [27].

Core Viewpoint - Several small and medium-sized banks in China have announced a reduction in RMB deposit rates, with cuts ranging from 10 to 20 basis points [2][3]. Group 1: Deposit Rate Adjustments - Jiangsu Bank and Nanjing Bank have adjusted their three-year fixed deposit rates, with Nanjing Bank's rate decreasing from 1.85% to 1.75% [3]. - Jilin Longtan Huayi Village Bank has lowered its current deposit rate from 0.2% to 0.15% and reduced fixed deposit rates across various terms by 10 to 20 basis points [3]. - Shandong Gaomi Huimin Village Bank has also cut its fixed deposit rates by 10 basis points for 6-month, 1-year, and 2-year terms, and by 20 basis points for 3-year and 5-year terms [3]. - Other banks, including Zhejiang Shengzhou Ruifeng Village Bank and Jilin Baishan Hunjing Hengtai Village Bank, have similarly reduced deposit rates by 10 to 20 basis points [3]. Group 2: Banking Sector Performance - As of the end of Q2, China's commercial banks reported a net interest margin of 1.42%, a decrease of 0.01 percentage points from the end of Q1, indicating pressure on bank profitability [3]. - The reduction in deposit rates is a strategy for banks to cope with the declining net interest margin, allowing them to maintain competitiveness in short-term deposits while lowering long-term funding costs [3]. Group 3: Historical Context and Market Trends - In May, six major banks collectively lowered deposit rates by up to 25 basis points, setting a benchmark for market rates [4]. - From 2017 to 2022, the deposit scale of major Chinese banks grew from 79.31 trillion yuan to 119.24 trillion yuan, with a compound annual growth rate of 8.50% [4]. - Since 1994, China's benchmark deposit rate has gradually decreased, and while the central bank's rate has not changed in seven years, market rates have continued to decline, significantly reducing actual deposit yields [6]. Group 4: Macroeconomic Effects - The reduction in deposit rates has a dual macroeconomic effect: it may stimulate consumer spending while lowering corporate financing costs [7]. - For instance, with a three-year fixed deposit rate of 1.75%, a deposit of 100,000 yuan would yield 100 yuan less annually compared to before the adjustment, potentially translating into increased consumer spending [7]. - The shift of funds towards equity markets and the real economy could facilitate structural economic transformation and upgrading [7].