Core Viewpoint - Major Chinese banks, including Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of Communications, and Postal Savings Bank, have collectively adjusted their deposit products, particularly reducing the availability of medium to long-term deposit offerings as year-end savings demand increases [1][3]. Group 1: Changes in Deposit Products - Many customers, such as a resident in Beijing, have reported difficulties in finding suitable 5-year large-denomination certificates of deposit (CDs) as these products are no longer displayed by major banks [3]. - The interest rates for 3-year related products have dropped to between 1.5% and 1.75% across various banks [3]. - Smaller banks are also following suit, with institutions like Meizhou Commercial Bank and Yilian Bank removing 5-year fixed deposit products from their offerings [5]. Group 2: Reasons for Adjustments - The withdrawal of long-term deposit products is a response to the ongoing decline in banks' net interest margins, driven by falling loan rates that have significantly reduced asset yields [5]. - Analysts suggest that banks are compelled to eliminate high-interest long-term products to avoid severe interest margin losses or potential deficits, which could threaten their long-term stability and pose systemic risks [5]. Group 3: Implications for the Banking Sector - The adjustments in deposit products are expected to enhance the certainty of banks' profit forecasts, providing fundamental support for valuation recovery, particularly for large banks with low-cost liabilities and high dividend yields [6]. - The reduction in deposit rates may lead to a "deposit migration" effect, where funds seeking higher returns move from the banking system to capital markets, potentially benefiting direct financing markets [6].

Core Viewpoint - The recent decision by the Tongyu County Mengyin Village Bank to cancel its five-year fixed deposit product reflects the broader trend among small and medium-sized banks to adjust their deposit structures in response to declining interest margins and pressures on profitability [1][2][5]. Group 1: Bank Adjustments - Tongyu County Mengyin Village Bank is the first commercial bank to eliminate the five-year fixed deposit product, indicating a direct transmission of pressure from declining interest margins to product offerings [2]. - The bank has also reduced interest rates on other fixed deposit products, with the one-year rate decreasing from 1.50% to 1.45%, the two-year rate from 1.60% to 1.55%, and the three-year rate from 1.95% to 1.85% [2]. - Other small and medium-sized banks have similarly announced reductions in deposit rates, with some experiencing cuts of up to 80 basis points [2]. Group 2: Industry Trends - The adjustments made by small and medium-sized banks are indicative of a larger industry trend, where banks are reluctant to accept longer-term deposits due to cost control and liability structure management [3]. - The five-year large denomination certificates of deposit (CDs) have also seen a decline, with many banks no longer offering them, and new issuances reflecting lower interest rates compared to previous offerings [4]. - Analysts suggest that the downward trend in net interest margins will likely continue, prompting more banks to adjust their long-term deposit products [5][6]. Group 3: Future Outlook - Industry experts predict that more banks may follow suit in adjusting their long-term deposit products as net interest margins remain under pressure [5]. - The ongoing decline in loan market quoted rates (LPR) and the need for banks to manage funding costs effectively will drive further reductions in deposit rates [6]. - Banks are expected to continue lowering deposit rates to alleviate the pressure on interest margins, with varying degrees of adjustment based on market competition and customer positioning [6].