Group 1 - The recent reduction in loan market quotation rate (LPR) by 10 basis points is a direct result of the People's Bank of China's interest rate cuts, with major state-owned and joint-stock banks also lowering their RMB deposit rates by an average of 16 basis points [1] - The adjustment in deposit rates aims to balance the reduction in financing costs for the real economy with the stability of banks' net interest margins, indicating an increased linkage between deposit and loan rates as part of the market-oriented interest rate reform [1] - Despite the LPR reduction, banks are facing challenges in maintaining net interest margins, which have reached historical lows, necessitating a larger decrease in deposit rates compared to loan rates to stabilize margins [1] Group 2 - The current economic environment in China presents challenges such as the transition of old and new growth drivers and complex international trade dynamics, making a stable financial system crucial for supporting the real economy [2] - The average reduction in deposit rates is the largest in recent years, yet banks still face significant challenges in maintaining net interest margins, which fell by 9 basis points to 1.43% in the first quarter [2] - To enhance profitability and stabilize internal capital sources, banks need to optimize their deposit and loan product structures, increase non-interest income, and better meet customer financial service needs [2]