Scale - The total wealth management scale increased by 0.72 trillion, returning to over 30 trillion [1] - As of the end of Q2 2025, the wealth management balance reached 30.67 trillion, reflecting a 2.4% growth since the beginning of the year [1][2] - The Q2 single-season wealth management scale increment was 1.53 trillion, lower than the 1.89 trillion from the same period last year, but higher than the average increment of 0.64 trillion from 2021 to 2023 [1][3] Product Characteristics - Open-ended products maintained a stable proportion of around 80%, while cash management products decreased to 6.4 trillion [5] - Open-ended products contributed 86.1% of the scale increment in the first half of the year, with significant growth from minimum holding period products [5] - Fixed income products accounted for 97.2% of the total wealth management products, with a slight increase in the proportion of mixed and equity products [8][10] Asset Allocation - As of the end of Q2 2025, cash and bank deposits reached 8.18 trillion, increasing by 500 billion since the beginning of the year [11] - The allocation to public funds significantly increased by 450 billion, reaching 1.38 trillion, indicating a growing preference for high liquidity assets [12] - The overall asset allocation showed a tendency to increase high liquidity assets while reducing credit bonds [9][11] Market Dynamics - The "disintermediation" effect is expected to support the growth of wealth management scale, although potential disturbances may increase in the second half of the year [13][14] - The low interest rate environment and the need for stable returns are driving the demand for fixed income products, while cash management products face challenges due to lower yields [15] - Regulatory changes are anticipated to enhance the asset management capabilities of wealth management institutions, focusing on quality over scale [16]

Core Insights - Cash management products are gaining investor attention due to their flexible redemption, lower risk, and relatively stable returns, especially as bank deposit rates decline [1][2] - The average 7-day annualized yield for cash management products is 1.38%, with some bank products reaching nearly 3%, while money market funds average around 1.25% [2] - Regulatory policies have aligned the liquidity and redemption mechanisms of cash management products and money market funds, narrowing the gap in risk and return [2][4] Group 1 - Cash management products include cash management wealth management and money market funds, suitable for low-risk tolerance and high liquidity needs [2] - Investors should prioritize products from large institutions, considering factors like yield, redemption mechanisms, and fees [1][2] - High-yield cash management products may have small initial scales and could see yields drop as more funds are added [1] Group 2 - The liquidity design of cash management products, including subscription and redemption confirmation days, is crucial for investors [4] - Significant yield differences between products only become apparent with larger investment amounts, suggesting that investors should consider recent yield performance [4] - To enhance overall investment returns, investors should balance their portfolios across various asset classes like stocks, bonds, and gold based on their risk preferences [4]

银行 2025 年 06 月 19 日 投资评级：看好（维持） 行业走势图 数据来源：聚源 -24% -12% 0% 12% 24% 36% 2024-06 2024-10 2025-02 银行 沪深300 liuchengxiang@kysec.cn 证书编号：S0790523060002 负债端：大行非银存款延续高增，4-5 月累计新增 2.6 万亿元 5 月大行负债端仍然延续 4 月非银存款大幅增长的态势，推动存贷增速差继续向 上修复。我们认为这可能反映两个现象：一是银行阶段性向非银同业扩表，二是 存款降息后搬家效应初步显现（分流向理财及其他资管产品、股市等）。从其他 存款性公司资产负债表来看，5 月"对其他金融机构债权"增加 6226 亿元，较 4 月增量明显修复，或反映银行向非银融出恢复，以及部分银行在预期 6 月负债缺 口较大时提前增加短债、货基等短期资产储备。由于有较大比例定存尚未到期， 推测脱媒现象或陆续反映。 评估下阶段的路径，居民存款或主要分流至风险偏好接近的现金管理类、短债 理财，而股市涨幅缓慢时分流存款效能较弱。5 月"对其他金融性公司负债"和 "计入 M2 的存款"增幅接近，可能说明 ...

Core Viewpoint - The recent reduction in deposit rates by major banks in China, with the one-year fixed deposit rate falling below 1%, poses challenges for money market funds and cash management products, prompting a need for strategies to adapt to this low-yield environment by learning from overseas experiences [2][3]. Group 1: Overview of Low-Interest Rate Environments - In the U.S., the money market fund (MMF) yield entered the "1%" era during three periods: 2003-2004, 2009-2017, and 2020-2021, with significant capital outflows during low yield periods [5][6][7]. - The Eurozone experienced a decline in MMF scale during low-interest periods, but saw an increase during negative interest rates due to the relative attractiveness of MMFs compared to other rates [9][10][11][12]. - Japan's MMFs faced extinction in a negative interest rate environment, with the money reserve fund (MRF) becoming dominant due to its association with securities accounts [14][16]. Group 2: Factors Influencing MMF Scale Changes - The elasticity of nominal interest rates to policy rate changes leads to different behaviors in fund flows, with MMFs showing higher sensitivity compared to bank deposits [21][22]. - The different approaches to negative interest rate policies in Europe and Japan resulted in contrasting outcomes for MMFs, with European funds expanding while Japanese funds contracted [42][43][45]. - Inflation impacts real interest rates, influencing market preferences for low-risk assets, with higher real rates encouraging savings and benefiting MMFs [48][49]. Group 3: Strategies for Fund Managers - Fund managers in low-interest environments often reduce fees to enhance client returns, as seen in the U.S. during the 2003-2004 period [51][56]. - Seeking yield through credit and liquidity premiums becomes crucial, with U.S. MMFs increasing allocations to commercial paper and corporate notes during low yield periods [52]. - Building product ecosystems and increasing overseas investments are strategies employed by fund managers to maintain competitiveness in challenging environments [54][58]. Group 4: Regulatory Responses - Overseas regulators have generally moved towards net asset value (NAV) reform for MMFs to ensure industry health in low-rate environments, with Europe implementing market value-based valuations [61]. - Japan's earlier reforms in MMF valuation have set a precedent for adapting to low-interest conditions, allowing for more flexible investment strategies [61]. Group 5: Implications for China - China's dual-track interest rate system means that the relationship between money market rates and deposit rates is influenced by both market and policy factors, with recent trends showing deposit rates adjusting more rapidly [63][64]. - The future of MMFs in China will depend on whether money market rates fall significantly below deposit rates, with current trends suggesting a continued advantage for MMFs [70]. - A potential decline in inflation could further elevate real interest rates, benefiting low-risk assets like MMFs [71].

Core Viewpoint - The People's Bank of China reported a significant increase in RMB deposits in May, driven by a surge in non-bank financial institution deposits, which reached a near ten-year high, indicating a shift in asset allocation preferences among residents and enterprises towards higher-yielding non-bank financial products [1][2]. Group 1: Deposit Growth and Structure - In May, non-bank deposits increased by 1.19 trillion yuan, marking the highest growth for the same period in nearly a decade [2]. - Cumulatively, non-bank deposits have risen by 3.07 trillion yuan this year, which is 680 billion yuan more than the same period last year [2]. - The increase in non-bank deposits is attributed to the declining deposit interest rates, prompting a "migration effect" where individuals and businesses prefer to allocate assets through non-bank institutions [2][3]. Group 2: Interest Rate Impact - The continuous decline in deposit rates has led to a shift in asset allocation from traditional bank deposits to higher-yielding financial products such as money market funds and cash management products [2][4]. - Major state-owned banks and joint-stock banks have lowered deposit rates, with the one-year fixed deposit rate reduced to 0.95% [2]. - This trend is expected to persist, as lower deposit rates encourage more funds to flow into consumption and investment activities, enhancing economic vitality and optimizing asset allocation [4][5]. Group 3: Diversification of Asset Allocation - There is a notable shift from "single deposits" to a diversified approach involving "wealth management + equities," driven by the deepening of interest rate marketization [4]. - The changing asset allocation mindset among residents is likely to lead to increased investments in stock markets, bond funds, private asset management products, and insurance savings products [4]. - The ongoing trend of deposit migration is expected to continue, with funds increasingly directed towards money market funds, bank wealth management, bond markets, and stock markets [4][5].

Core Viewpoint - The article highlights significant changes in the flow of funds in the financial market, driven by a decline in deposit interest rates, leading to a "deposit migration" effect where individuals and businesses are shifting their funds to higher-yielding financial products like money market funds and cash management products [1][4][5]. Summary by Sections Deposit Growth - As of the end of May, the balance of RMB deposits reached 316.96 trillion yuan, a year-on-year increase of 8.1%, with new deposits in May amounting to nearly 2.2 trillion yuan, which is 500 billion yuan more than the same period last year [1][3]. - Non-bank deposits increased by 1.19 trillion yuan in May, marking the highest level for the same period in nearly a decade, with a year-on-year increase of 300 billion yuan [3][4]. Factors Influencing Non-Bank Deposits - The significant rise in non-bank deposits is closely linked to the increased activity in the financial market and a shift in fund flows, particularly due to the recent round of deposit rate cuts [4][5]. - Analysts suggest that the decline in deposit rates has led residents and some businesses to move their funds from demand deposits to higher-yielding financial products, directly contributing to the substantial growth in non-bank deposits [5][6]. Bank Wealth Management Growth - The continued growth of bank wealth management products serves as strong evidence of the "deposit migration" effect, with a month-on-month increase of 340 billion yuan in May, bringing the total to 31.6 trillion yuan [6]. - The performance of credit bonds has enhanced the attractiveness of wealth management products, providing stable underlying asset returns and improving investor experience, which in turn attracts more funds [6]. Monthly Deposit and Loan Growth Discrepancies - In May, while deposits saw a significant increase, RMB loans rose by only 620 billion yuan, a year-on-year decrease of 330 billion yuan, indicating a divergence in growth rates [12]. - Experts note that the differences in monthly deposit and loan growth reflect the diversification of financial institutions' assets and changes in financing structures, necessitating a long-term perspective on these dynamics [12][14]. Economic Context and Market Sentiment - The resilience in May's data is attributed to a series of financial support measures that have boosted market confidence, leading to signs of recovery in investment and consumption activities [10]. - The overall increase in deposits is also influenced by the gradual release of fiscal funds and the recovery of local government financing, which supports the demand for demand deposits [10][13].

Core Viewpoint - The article highlights significant changes in the flow of funds in the financial market, driven by a decline in deposit interest rates, leading to a "deposit migration" effect where individuals and businesses are shifting their funds to higher-yielding financial products like money market funds and cash management products [1][4][6]. Group 1: Deposit Growth - As of the end of May, the balance of RMB deposits reached 316.96 trillion yuan, a year-on-year increase of 8.1%, with new deposits in May amounting to nearly 2.2 trillion yuan, which is 500 billion yuan more than the same period last year [1][3]. - Non-bank deposits increased by 1.19 trillion yuan in May, marking the highest level for the same period in nearly a decade, with a year-on-year increase of 300 billion yuan [3][4]. - The total scale of bank wealth management products grew by 340 billion yuan month-on-month in May, reaching 31.6 trillion yuan, further evidencing the "deposit migration" effect [6]. Group 2: Factors Influencing Deposit Changes - Analysts attribute the significant changes in non-bank deposits to increased market activity and shifts in fund flows, particularly due to the recent round of deposit rate cuts, which has led to a decrease in deposit yields [4][5]. - The decline in deposit rates has prompted residents and businesses to move their funds from demand deposits to higher-yielding financial products, thus driving the substantial growth in non-bank deposits [6][10]. - The increase in household deposits by 470 billion yuan in May, along with a decrease in non-financial corporate deposits by 417.6 billion yuan, reflects a complex interplay of seasonal factors and economic conditions [8][9]. Group 3: Loan Growth Dynamics - In contrast to the significant increase in deposits, RMB loans rose by 620 billion yuan in May, which is 330 billion yuan less than the same period last year, indicating a divergence in deposit and loan growth [12]. - The disparity in monthly growth rates of deposits and loans is seen as a reflection of the diversification of financial institutions' assets and changes in financing structures [12][14]. - The overall average growth rates for deposits and loans since 2021 have been approximately 9% and 9.6%, respectively, suggesting a long-term balance despite monthly fluctuations [12][13].

Core Insights - The article highlights a significant shift in the flow of funds from traditional bank deposits to higher-yielding financial products such as money market funds and cash management products, driven by declining deposit interest rates [1][4]. Group 1: Financial Data Overview - As of the end of May, the balance of RMB deposits reached 316.96 trillion yuan, reflecting a year-on-year growth of 8.1%, with new deposits in May amounting to nearly 2.2 trillion yuan, an increase of 500 billion yuan compared to the same period last year [2]. - Non-bank deposits saw a substantial increase of 1.19 trillion yuan in May, marking the highest level for the same period in nearly a decade, with a year-on-year increase of 300 billion yuan [3]. - The total scale of bank wealth management products grew by 340 billion yuan month-on-month in May, reaching 31.6 trillion yuan, indicating a strong "deposit migration" effect [4]. Group 2: Market Dynamics - The decline in deposit interest rates has led to a "deposit migration" phenomenon, where both residents and enterprises are moving their funds to higher-yielding financial products [4][6]. - The increase in non-bank deposits is closely linked to heightened activity in the financial markets and a shift in fund flows, as evidenced by the significant rise in bank wealth management products [4][6]. - The overall growth in deposits in May is attributed to multiple factors, including improved market expectations, enhanced economic vitality, and increased demand for "liquid funds" from enterprises and residents [6][7]. Group 3: Loan and Deposit Growth Discrepancies - In May, RMB loans increased by 620 billion yuan, which is a year-on-year decrease of 330 billion yuan, indicating a divergence in the growth rates of deposits and loans [9][10]. - The differences in monthly growth rates of loans and deposits are seen as a reflection of the diversification of financial institutions' assets and changes in financing structures [10][11]. - The overall stability in the growth rate of combined bank deposits and wealth management products remains around 8%, suggesting a balanced financial environment despite monthly fluctuations [10][11].

Core Viewpoint - The recent collective decision by nine joint-stock banks to lower deposit rates marks China's official entry into a low-interest-rate era, with significant implications for the banking sector and the economy as a whole [1]. Group 1: Interest Rate Trends - The deposit interest rates have seen a dramatic decline from 4% in 2014 to as low as 0.05% for current deposits and below 1% for one-year fixed deposits [1]. - Since 2022, commercial banks have implemented seven rounds of interest rate cuts, totaling a reduction of over 300 basis points [1]. - The one-year Loan Prime Rate (LPR) has decreased by 35 basis points, while the five-year LPR has dropped by 60 basis points in 2024 alone, indicating a rapid decline in interest rates [1]. Group 2: Banking Sector Implications - The net interest margin for banks has fallen below the critical threshold of 1.8%, with a current figure of 1.43%, raising concerns within the industry [4]. - The significant drop in deposit rates (up to 25 basis points) has outpaced the LPR reduction (10 basis points), reflecting a strategic choice by banks to alleviate operational pressures while ensuring lower financing costs for enterprises [4]. - This adjustment is projected to relieve the banking system of over 200 billion yuan annually, which can be redirected to support manufacturing and small enterprises [4]. Group 3: Investment Strategies - With the decline in deposit rates, there is a suggestion for depositors to consider alternative investment options, such as government bonds, cash management products, and long-term fixed-rate insurance products [5]. - Financial experts recommend diversifying investments, with allocations suggested for large-denomination certificates of deposit, money market funds, and bond funds, while maintaining some liquidity [5]. - The transition to a low-interest-rate environment necessitates a shift in investment strategies, encouraging investors to accept moderate risks to adapt to the new financial landscape [5]. Group 4: Economic Context - The trend of declining interest rates is not unique to China, as similar patterns have been observed in Japan and Europe, where low or negative interest rates have persisted for years [1]. - The capital return rate in China has decreased from 15% in 2007 to 5.8% in 2023, which is a key factor driving the downward trend in interest rates [1]. - The shift towards lower interest rates is viewed as a necessary phase in economic transformation rather than a regression of the financial system [7].

Investment Rating - The industry rating is "Positive" (maintained) [4] Core Viewpoints - The reduction in deposit rates is greater than expected, with the average reduction being 16 basis points, which is higher than the 10 basis points reduction in loan rates, indicating a clear regulatory support for interest margins [5] - The phenomenon of deposit disintermediation is expected to persist long-term, although the degree of disintermediation is weaker than last year due to manual interest compensation governance [2] - The average annualized yield for cash management products is 1.46%, which is higher than the actual interest rate for state-owned banks' 1-year deposits by 36 basis points, suggesting that wealth management products still have a comparative advantage over deposits [2] Summary by Sections Deposit Rate Adjustments - As of May 20, 2025, the LPR for 1-year and 5-year has been lowered by 10 basis points to 3.0% and 3.5% respectively, with significant reductions in various deposit rates across state-owned banks and China Merchants Bank [5] - The new rates for different deposit types include a reduction in the current deposit rate to 0.05% and a 15 basis point reduction for 3-month, 6-month, and 1-year fixed deposits [5] Market Impact - Short-term market expectations for interest rate cuts have been fully priced in, with limited immediate impact on bond market prices. However, in the medium to long term, the reduction in deposit rates may improve funding costs and lead to a decline in bond yields [3] - The improvement in funding costs is expected to enhance the ticket yield for banks, as previous constraints on allocation due to funding costs are alleviated [3] Investment Recommendations - The report suggests that bank stocks are not in the latter stage but rather at the beginning of a long cycle, with regulatory support for interest margins and declining rates benefiting dividend stocks [6] - Key recommendations include city commercial banks such as Jiangsu Bank and Chengdu Bank, as well as dividend-paying banks like Agricultural Bank and China CITIC Bank [6]