Core Viewpoint - The overall sensitivity of deposit scale to the reduction in deposit interest rates is low under the trend of low interest rates [1] Group 1: Deposit Scale and Interest Rate Sensitivity - The deposit scale is not sensitive to the reduction in non-interbank deposit rates, primarily due to the manual interest compensation rectification in April 2024, which caused a short-term outflow of deposits to asset management products [2] - Despite several rounds of deposit rate cuts since 2022, the year-on-year growth rate of personal and corporate deposits has aligned with the growth rate of broad money supply, with the proportion of deposits in broad money supply rising from around 48% to a peak of 52% by March 2024 [2][3] - The proportion of deposits in low-risk preference funds has shown a slight decline from a peak of 79.3% in March 2023, indicating manageable outflow pressure [2] Group 2: Impact of Deposit Rate Cuts - The disturbances caused by deposit rate cuts on fund outflows were not significant before 2024, but became more pronounced afterward due to increased price comparison willingness in a low-interest environment [3] - Following the deposit rate cuts in July and October 2024, there was a noticeable decline in the year-on-year growth of large bank deposits, indicating a shift towards asset management products [3][4] - The current round of deposit rate cuts is not expected to lead to a significant tightening of the funding environment, as the year-on-year growth of deposits has remained stable despite the cuts [4] Group 3: Future Expectations - The attractiveness of asset management products relative to deposits is expected to decrease due to the ongoing adjustments in performance benchmarks and the gradual implementation of net value rectification [4] - The company anticipates that the ticket interest strategy will continue to prevail, with high-grade short-duration credit bonds likely to benefit from some funds flowing from deposits to asset management products [4]

Core Insights - The overall sensitivity of deposit scale to the reduction of deposit rates is low, indicating a strong willingness among individuals and businesses to allocate funds to bank deposits despite rate cuts [1][10] - The shift of deposits from the banking system to asset management products is primarily attributed to the manual interest compensation rectification in April 2024, which had a short-term impact but began to stabilize by July of the same year [1][10] - The proportion of personal and corporate deposits in the broad money supply has increased from approximately 48% to 52% by March 2024, reflecting a robust demand for bank deposits [1][10] Deposit Rate Adjustments - The reduction in deposit rates in July and October 2024 led to a noticeable decline in the year-on-year growth of large bank deposits, dropping from 5.8 trillion yuan to 5.2 trillion yuan and from 5.0 trillion yuan to 4.8 trillion yuan respectively [3] - The asset management product scale saw a rebound, with a shift from a year-on-year decrease of 629.5 billion yuan in August 2024 to a slight increase of 10 billion yuan, and a similar trend was observed in November 2024 [3] Deposit Growth Trends - Large banks' personal and corporate deposit year-on-year growth fluctuated, with notable increases and decreases observed in various months, indicating a dynamic response to interest rate changes [5] - The year-on-year growth of deposits in small and medium-sized banks also showed variability, with a peak growth of 81.56 billion yuan followed by a decrease of 25.29 billion yuan [5] Market Reactions - The bond market typically reacts in advance to expectations of deposit rate cuts, with rates generally declining before the official announcement, although the actual impact on market trends remains limited [10] - Following the last three deposit rate cuts, the yields on various bonds, including government bonds and credit bonds, generally trended downward over the subsequent trading days [10] Future Outlook - The current round of deposit rate cuts is expected to have a limited impact on the outflow of funds, with the probability of a return to a tight liquidity situation similar to the first quarter of the year being low [10] - The attractiveness of asset management products is anticipated to decrease due to ongoing adjustments in performance benchmarks, which may lead to a shift of funds back to deposits [10]