Group 1 - Major Chinese banks, including ICBC, ABC, BOC, CCB, BOCOM, and CMB, collectively lowered deposit rates across various products on the 20th [1] - The rates for fixed-term deposits were reduced by 15 basis points for 3-month, 6-month, 1-year, and 2-year terms, now at 0.65%, 0.85%, 0.95%, and 1.05% respectively; 3-year and 5-year terms were lowered by 25 basis points to 1.25% and 1.30% [1][4] - The 7-day notice deposit rate was also reduced by 15 basis points [1] Group 2 - This marks the first round of deposit rate cuts by banks this year, with a calculation indicating that interest for a 100,000 yuan deposit for one year will decrease by 150 yuan, and for a 200,000 yuan deposit over three years, it will decrease by 1,500 yuan [4] - Concurrently, the Loan Prime Rate (LPR) saw its first decline of the year, with the 1-year LPR at 3.0% and the 5-year LPR at 3.5%, both down by 10 basis points from the previous month [4] - For a 1 million yuan loan over 30 years, the LPR decrease results in a monthly payment reduction of approximately 54 yuan and a total repayment reduction of about 20,000 yuan [4] Group 3 - Chief economist of China Minsheng Bank, Wen Bin, noted that the deposit rate cuts led by major state-owned and joint-stock banks create space for LPR adjustments, as the reduction in deposit rates exceeds that of LPR [5] - Wen Bin emphasized that ongoing external uncertainties and trade frictions are affecting market expectations and export growth, which may slow down credit expansion for foreign trade enterprises and related sectors [5] - The appropriate reduction in LPR is expected to guide loan rates downward, stimulating effective financing demand and stabilizing credit levels to support economic recovery [5]

Core Viewpoint - A new round of deposit rate cuts has been implemented, with major state-owned banks and some joint-stock banks lowering their deposit rates, marking the seventh reduction since September 2022 and the first in seven months since October of the previous year [1][4]. Summary by Sections Deposit Rate Adjustments - Major state-owned banks have reduced the interest rates for demand deposits to 0.05%, while the one-year fixed deposit rate has fallen below 1% [1][4]. - The three-month, six-month, one-year, and two-year fixed deposit rates have been lowered by 15 basis points (BP) to 0.65%, 0.85%, 0.95%, and 1.05% respectively, while the three-year and five-year rates have been reduced by 25 BP to 1.25% and 1.3% respectively [1][2]. Impact on Depositors - For a three-year fixed deposit of 200,000 yuan, the interest difference before and after the adjustment is 1,500 yuan, while for 1,000,000 yuan, the difference is 7,500 yuan [2]. Follow-up Actions by Other Banks - Joint-stock banks, such as China Merchants Bank, are expected to follow suit with similar adjustments, with most likely to implement changes in the near term [3]. - The adjustments in deposit rates are anticipated to be uniform across banks, with a focus on controlling liability costs through adjustments to the upper limits of interest rates [3]. Market Expectations and Economic Indicators - The recent deposit rate cuts were anticipated in the market, following the central bank's announcement of a reserve requirement ratio (RRR) cut and interest rate reductions [4]. - The latest Loan Prime Rate (LPR) indicates a decline, with the five-year LPR at 3.5% and the one-year LPR at 3%, both down by 10 BP [4]. - Analysts predict that the average loan interest rate will drop to a historical low of 3.75% by the first quarter of 2025, with commercial banks' net interest margins also expected to decrease [4].