be imperative! Several banks responded to the reduction of interest rates on existing housing loans

The adjustment of the interest rate of stock housing loans has gone from "support and encouragement" to "guidance", and finally came to the ready implementation state.

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Recently, a number of listed banks intensively disclosed their mid-term results in 2023 and held performance conferences. The progress in optimizing the interest rate of stock housing loans has become a topic of great concern, and many bank executives also took this opportunity to respond.

Responses from multiple banks

On August 29, a screenshot of a bank's Notice on Convening the Launching Meeting of the Interest Rate Adjustment Project for Individual Housing Loan Stock was circulated on the Internet, which attracted great attention from the market.

As shown in the figure, the bank plans to hold a kick-off meeting on the interest rate adjustment project of individual housing loan stock on August 30, requiring the data management department, software center, data center, test center, personal finance department/consumer insurance department, company department, online finance department and other departments to attend the meeting. Later, some media confirmed that the screenshot information was true. The upcoming meeting was held by Bank of Communications, one of the six largest state-owned banks. The meeting was led by the retail credit department of the bank.

"It shows that the retail department or personal loan department of the bank is actively deploying work to reduce the interest rate of outstanding housing loans, especially the departments with software centers and data centers attending the meeting, which involves finding out the interest rate of outstanding customers' housing loans in order to formulate more precise policies." Yan Yuejin, research director of E-House Research Institute, believes that this shows that all banks are actively deploying this work at present, The work of reducing the interest rate of stock housing loans is no longer verbal, but enters the stage of demonstration and practice.

More banks also made it clear that the adjustment of the interest rate of stock housing loans has been put on the agenda.

——China Construction Bank: will affect the net interest margin

On August 24, at the 2023 interim performance meeting of China Construction Bank, Liu Rong, chief financial officer of China Construction Bank, said: "The interest rate of stock mortgage loans was renegotiated according to the market-oriented principle, which will indeed have some impact on the subsequent bank net interest margin. At present, the detailed rules of the regulatory authorities have not yet come out, and the banks are also communicating. It is still difficult to calculate now, and there will certainly be some downward pressure on the overall (net interest margin). "

Li Yun, Vice President of China Construction Bank, also responded to the question of repayment in advance. He said: "We have also observed that the demand for prepayment newly accepted in recent months has generally stabilized, down a lot from the peak in April. In the future, we will continue to do a good job in related services, and take multiple measures to promote the high-quality development of retail credit."

——CITIC Bank: It is difficult to implement the "one size fits all" policy since the plan has been prepared

On August 25, Xie Zhibin, Vice President of China CITIC Bank, said at the semi annual performance conference of China CITIC Bank in 2023 that China CITIC Bank paid close attention to the regulatory orientation and market trends, had timely combed and analyzed the business situation within the bank, and had made plans for possible business adjustments.

"Based on the information currently available, different banks in the same industry have different understandings of the policy. We understand that the actual operation needs to consider the consistency of customer policy, as well as regional differences, interest rate adjustment and other factors. For example, from the perspective of customers, the implementation of banks according to equivalent standards is more conducive to improving fairness and reducing customer public opinion. However, from the regional perspective, in history, the real estate policy was implemented because of the city, and the mortgage loan interest rates in different regions were also quite different. It was really difficult to implement the "one size fits all" management policy when adjusting the stock interest rate. " Xie Zhibin said.

——Huaxia Bank: orderly promote the follow-up work

On August 28, at the 2023 semi annual performance presentation meeting of Huaxia Bank, Guan Wenjie, president of Huaxia Bank, said that the adjustment of the interest rate of existing housing loans would indeed have a certain impact on banks. Under the guidance of the regulatory authorities, the Bank will pay close attention to market trends, orderly promote the implementation of follow-up related work, and fulfill its social responsibilities.

——Agricultural Bank of China: We will promptly formulate specific operational rules

On August 29, at the interim performance conference of the Agricultural Bank of China, Lin Li, Vice President of the Agricultural Bank of China, said that recently the People's Bank of China has clearly guided commercial banks to adjust the interest rate of existing personal housing loans in an orderly manner, which is conducive to reducing the financial burden of some existing resident loan customers and reducing the pressure on commercial banks to repay loans in advance.

He said that after the relevant policies and plans were clear, the Agricultural Bank of China would quickly formulate specific operating rules, complete the preparation of the contract text as soon as possible, speed up the system transformation and other adjustments, and actively organize and implement them.

——China Merchants Bank: downward adjustment is imperative

On August 29, China Merchants Bank also held a mid-term performance exchange meeting. Peng Jiawen, assistant president of China Merchants Bank, said that from the voice of the central bank, "encouragement and support" directly turned into "guidance" on the interest rate adjustment of stock housing loans. He judged that it was also imperative to reduce the interest rate of stock housing loans, which was a high probability event.

Peng Jiawen revealed that at present, China Merchants Bank has formulated a corresponding plan, but there is no final plan. From the results of internal measurement, the reduction of the interest rate of stock housing loans is generally controllable, and subsequently China Merchants Bank will do a good job in asset liability allocation and structural arrangement, and balance the growth relationship between risk and quantity.

——Qilu Bank: make all preparations

On August 30, at the semi annual performance meeting of Qilu Bank in 2023, Gao Yongsheng, chief financial officer and general manager of the Planning and Finance Department of Qilu Bank, said that Qilu Bank would pay attention to the dynamics of the interbank market, and adjust the listing interest rate of deposits in due time in combination with the optimization of the debt structure. In terms of adjusting the interest rate of stock housing loans, Qilu Bank will closely follow the market trend under the guidance of the regulatory department, make all preparations, and orderly promote the follow-up related work.

Industry outlook: policy implementation and orderly promotion based on the city

The market has always paid close attention to how to optimize the interest rate of outstanding housing loans, and many departments have also made continuous efforts to promote the progress of this adjustment. On August 1, the Central Bank and the State Administration of Foreign Exchange held a working conference in the second half of 2023, which specifically proposed to "guide commercial banks to adjust the interest rate of individual housing loans in stock in an orderly manner according to law."

However, it is also widely believed in the industry that due to certain differences in the scale, proportion and original interest rate of relevant business of commercial banks, a series of problems need to be sorted out and solved in the implementation process.

"Now there are many factors that need to be taken into account. For example, how to take into account the issue of city specific policies, how to take into account the issue of fairness while taking into account the issue of city specific policies, and whether the banking system can support these issues are particularly complex." As Peng Jiawen said, different cities, different branches, and many customers have different situations, all of which need to be taken into account.

The industry also looked forward to the impact of interest rate adjustment on the net interest margin of the banking industry. According to the estimation of some mainstream securities research institutions, every 10 BP (base point) reduction in mortgage interest rate will have an impact on the industry wide net interest margin of 0.9 BP to 1 BP.

Dong Ximiao, the chief researcher of China Merchants Association, believes that comprehensive consideration and orderly promotion are needed to find a balance point where the majority of lenders benefit and the bank has little influence. Considering that banks continue to yield profits to the real economy in recent years and the pressure of profit growth is great, the reduction of stock housing loans can be implemented in stages.

"The regulatory authorities can guide banks to reduce deposit interest rates, further reduce debt costs, delay the narrowing of interest margin, decline in profits and other pressures; the central bank can also support banks that have a greater impact due to a larger decline in the interest rate of outstanding housing loans, through additional targeted reduction of reserve ratio and other measures to improve the initiative of banks to reduce the interest rate of outstanding housing loans." Dong Ximiao said. (Zuo Yukun)

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