Core Insights - The attractiveness of wealth management products has increased as deposit rates decline, leading to a shift in asset allocation from traditional savings to diversified financial products [1][3][6] - A significant amount of high-interest deposits are maturing, prompting customers to invest in wealth management products, which is contributing to the growth of the wealth management market [2][3] - The trend of increasing demand for liquid deposits is changing the liability structure of banks, with a notable rise in the proportion of demand deposits [4][5] Wealth Management Market Growth - As of the end of Q3 2025, the total number of wealth management products in the market reached 43,900, a year-on-year increase of 10.01%, with a total scale of 32.13 trillion yuan, up 9.42% year-on-year [3] - The decline in deposit rates has led to a noticeable shift in customer behavior, with many opting for wealth management products that offer higher returns compared to traditional savings [2][3] Changes in Deposit Structure - The marginal improvement in demand deposits is evident, with a reported balance of 12.69 trillion yuan in demand deposits by the end of September 2025, reflecting a year-to-date increase of 502.3 billion yuan, or 4.12% [4][5] - The proportion of demand deposits has decreased by 1.21 percentage points compared to the beginning of the year, but the rate of decline has slowed, indicating a stabilization trend [5] Impact on Bank Profitability - The re-pricing of maturing high-interest deposits is expected to alleviate the pressure on net interest margins for banks, with potential downward adjustments in deposit interest rates by approximately 30 basis points per year [6][7] - The ongoing decline in deposit rates is anticipated to create new opportunities for monetary policy and capital markets, as banks can lower their funding costs [6][7]

Investment Rating - The industry is rated as "Recommended" with a positive outlook for the sector's fundamentals, expecting the industry index to outperform the benchmark index [2][35]. Core Insights - As of June 2025, the total deposit scale in China reached 280.7 trillion, with household deposits at 162 trillion and corporate deposits at 118.7 trillion. The growth rates from 2018 to mid-2025 show household time deposits increased by 165.4%, significantly outpacing corporate deposits [5][9][24]. - The estimated maturity of time deposits in 2025 is approximately 105 trillion, with a year-on-year increase of 14 trillion. This includes about 45 trillion maturing in the first quarter, indicating a substantial liquidity source for the capital market [15][30]. - The re-pricing of time deposits maturing from 2022 to 2024 is projected to reduce the annualized cost of liabilities for banks by approximately 1.5 trillion, contributing positively to the banks' interest margins [24][30]. - The liquidity impact of maturing time deposits is expected to create significant market expectations, with potential inflows into the capital market if market sentiment aligns [30][31]. Summary by Sections Current Deposit Scale and Structure - As of June 2025, total deposits in China are 280.7 trillion, with household deposits at 162 trillion and corporate deposits at 118.7 trillion. The growth rates from 2018 to mid-2025 indicate a significant increase in household time deposits [5][9][24]. Maturity Scale and Rhythm of Time Deposits - The estimated total maturity of time deposits in 2025 is around 105 trillion, with a notable increase in the first quarter. The data suggests a growing trend in the maturity of time deposits, which is crucial for liquidity in the capital market [15][30]. Impact on Interest Margins from Maturing Time Deposits - The re-pricing of time deposits maturing from 2022 to 2024 is expected to lower banks' annualized liability costs by about 1.5 trillion, positively affecting interest margins. This is anticipated to alleviate pressure on banks' interest margins starting in the second half of 2025 [24][30]. Liquidity Impact of Maturing Time Deposits - The large scale of maturing deposits is expected to create significant liquidity impacts, with potential inflows into the capital market. However, the transition of wealth into the capital market is viewed as a long-term process rather than an immediate outcome [30][31].