While the deposit scale is required, the cost of capital should be reduced. Different types of banks are facing this seemingly contradictory task, and how to use the scale to test the wisdom of each bank.
"We also don't want to raise the cost of capital, but we don't have the policy advantage to absorb low-cost corporate deposits; if the interest rate of personal deposits is not higher, how can customers choose us?" Xia Xinyi (a pseudonym), an insider of a regional bank, told the China Securities Journal that attracting customers to deposit at a higher interest rate is the last choice of small banks.
Small businesses are in a weak position in terms of customer base and brand effect, and pricing advantage is an important means for them to expand new customers and maintain old customers. At the cost of higher capital costs, what is the motivation for pursuing deposit scale? The competition for market share and customer resources, and the sufficient source of funds needed to support the loan scale may be the answer.
It is not only Xiaoxing who cannot abandon scale complex and speed complex. A few days ago, the reporter learned from a survey that some large banks paid higher interest to corporate customers through manual interest compensation to absorb large deposits. At present, banks are accelerating the rectification of the above practices to ease the downward pressure on net interest margin.
Small banks are reluctant to leave high interest deposits to compete for customers
"Anniversary large deposit certificates are coming! The deposit starts at 200000 yuan, the 3-year interest rate is 3.0%, and it is issued through all channels." When the marketing advertisement of a regional bank's WeChat official account is brushed, Beijing resident Zhang Li can't help but be moved. She told the reporter that her large deposit certificate had just expired, and it was difficult to find a large deposit certificate product with an interest rate of more than 3.0% on the market now, so she was considering flying to other places to deposit the money.
"Where are there more than 3.0% large deposit certificates? Please recommend banks and customer managers." On the social platform, many netizens, like Zhang Li, are looking for bank outlets with higher deposit rates. In the comment area, some netizens actively shared: "When coming to Guangdong, the interest rate of 5-year large deposit certificate of Guangdong Huaxing Bank for new customers is 3.20%" "When going to Zhejiang, the interest rate of 3-year large deposit certificate of Zhejiang Tailong Bank is 3.05%"
For a long time, the topic of "attracting deposits with high interest rates" has been frequently mentioned by regional banks. Even when commercial banks have experienced several interest rate cuts to cope with the continuous narrowing of net interest margin, regional banks still use large deposit certificate products with relatively strong deposit interest rates as a "sharp weapon" to attract customers.
For example, at the beginning of April, Shanxi Wenxi Rural Commercial Bank launched a three-year certificate of deposit with an interest rate of 2.95%. Jiangsu Wuxi Xishang Bank launched a large deposit certificate with a three-year interest rate of 3.0% and a five-year interest rate of 2.9%. Guangxi Tengxian Rural Credit Cooperatives launched large deposit certificates with a three-year interest rate of 3.25%.
Jiangsu Taicang Rural Commercial Bank opened the reservation channel of "the second phase of exclusive new customers - individual large deposit receipts". The minimum purchase amount of the product is 200000 yuan, the term is two years, and the annual interest rate is 2.7%. The deadline for reservation is April 30, and the subscription time starts from May 7.
"Although the overall deposit scale is growing, it is still difficult for small banks to attract deposits. Compared with large banks, we certainly do not have brand advantages. If the deposit interest rate is not competitive, it is difficult for customers to choose us.
For banks, if they want to be large-scale, they must first absorb enough deposits before they can release loans. We are very eager to open customer accounts in our bank, so that we can develop more business in the future. " Xia Xinyi said.
Another regional banker told the reporter: "In terms of the proportion of deposits, corporate deposits must account for a large proportion. With large amounts and low interest rates, they are the 'hot cakes' of banking industry. But some central state-owned enterprises have regulations that unit funds can only be deposited in large banks, and some regional banks also have local resource advantages. We can only' roll 'interest rates."
As for the overall growth of deposit scale, but small and medium-sized banks still have difficulty in obtaining deposits, Ren Tao, a distinguished researcher of the National Finance and Development Laboratory, told the reporter: "Some small and medium-sized banks are usually limited in the types of optional deposits they can provide customers, lacking effective means to maintain existing customers and expand customers. Apart from deposit pricing, some small and medium-sized banks have no other better means to maintain the relationship with customers. "
"Due to different market competition, customer positioning, debt structure and other factors, different banks have different rhythms and ranges of adjusting deposit interest rates. Small and medium-sized banks, especially rural commercial banks, have not yet fully exposed the downward pressure of interest margin due to the relatively sinking customer base and high interest margin." Dong Ximiao, the chief researcher of China Merchants Association, explained to the reporter some reasons why some small and medium-sized banks "took deposits against the trend".
Dahang's manual interest compensation for large customers
"At present, the total amount of deposits is quite a lot, but for a single institution, there is still a problem of high or low market share. Under the complex of scale and speed, some banks still value the growth rate, scale and share of deposit business, hoping to compete for more market shares and customer resources." Dong Ximiao said.
Corporate business is an important basis for the development and profitability of commercial banks. At present, many banks are improving the strategic position of corporate business. Among them, the market competition for corporate deposits is becoming increasingly fierce. According to the reporter's research, some large banks previously paid higher interest to corporate customers by means of manual interest compensation to absorb large deposits.
"Manual interest compensation was originally an error correction process for banks' business operations. On the premise that the system could not automatically complete interest settlement, special supplementary interest accrual transactions were used for manual interest calculation. However, some grassroots bank staff, in order to complete the task of collecting deposits, used manual interest compensation as a way of interest rate subsidy to bypass internal pricing authorization." A banker said.
In Dong Ximiao's opinion, the pressure of deposit assessment is often greater from top to bottom. However, the pressure of narrowing interest margin is usually difficult to effectively transmit to bank branches and grass-roots employees, which leads to the existence of various forms of high interest deposits. A few days ago, the self-discipline mechanism of market interest rate pricing issued the Proposal on Prohibiting the Manual Interest Compensation and High Interest Rate to Maintain the Competitive Order of the Deposit Market. In response, a number of bankers told reporters that their branch was in the process of rectification.
The Proposal clearly states that it is strictly prohibited to break through the authorization requirements of deposit interest rate or self-discipline ceiling in disguised form by means of prior commitment, manual interest supplement upon maturity, etc. From now on, the bank shall not promise or pay the interest supplement exceeding the upper limit of the authorized deposit interest rate to the customer in any form. The commitment of interest compensation made in violation of regulations before shall not be paid on the interest payment date. The bank shall immediately carry out self inspection and complete rectification before the end of April 2024.
In the view of Liu Chengxiang, chief analyst of Kaiyuan Securities Bank, state-owned banks and joint-stock banks may have greater pressure on rectification. The upper limit of interest rate of state-owned banks' agreement and call deposits is lower than that of other banks, so the competitiveness of deposit interest rate is weak, or they rely more on the way of interest compensation to "retain customers".
"Most of the enterprises that can obtain the 'manual interest compensation' from banks are central state-owned enterprises and industry leading enterprises. They are more strict about the selection of banks, and usually only state-owned banks and joint-stock banks can be included in their white list. We calculate that the deposit scale of these two types of banks involved in manual interest compensation is large or large, becoming the key constraint object of this new regulation." Liu Chengxiang said, This new regulation means that deposit supervision will be more refined, and all kinds of high interest rate deposit taking will be gradually restricted, which will help banks to effectively reduce deposit costs and mitigate the downward pressure of net interest margin.
Actively drive down the cost of debt
In addition to the tightening of restrictions on high interest deposits, banks have passively reduced deposit costs. Some banks are also actively adjusting the debt structure, tightening the issuance scale of high interest debt products, including large deposit receipts, and reducing capital costs to cope with the pressure of narrowing the net interest margin.
"At present, our bank has limited supply of three-year and five-year certificates of deposit. The purchase of certificates of deposit through mobile banking or online banking is generally for two years or less." A few days ago, China Merchants Bank The official customer service answered the reporter.
On April 18, the reporter checked the APP of several state-owned banks and joint-stock banks and found that the newly issued 5-year large deposit certificate products were very rare. China Merchants Bank CITIC Bank APP and other apps did not display two year or more maturity certificates of deposit products.
In addition to tightening the quota, from the perspective of interest rate, compared with fixed deposit products, the interest rate advantage of some banks' large deposit certificate products is no longer. with bank for economic construction For example, the APP of the bank shows that the deposit of large amount deposit certificate starts from 200000 yuan, the longest term is 3 years, and the highest annual interest rate is 2.35%, which is consistent with the highest annual interest rate of the bank's fixed deposit.
Industrial Bank APP shows that the bank's large deposit certificate starts with 200000 yuan, and the three-year interest rate is 2.60% at the highest. The 3-year interest rate of "etiquette deposit certificate" and "exclusive deposit" in the bank's fixed deposit is also 2.60%. The difference is that "etiquette deposit certificate" starts at 50 yuan and "exclusive deposit" starts at 5000 yuan.
Many bank executives said at the 2023 annual performance briefing that they would continue to drive down the cost of debt and increase the pressure drop on high cost deposits in 2024.
For example, Bank of China Vice President Zhang Yi said, "Although the deposit interest rate has been lowered three times in 2023, the characteristics of the regular and long-term trend of deposits are relatively obvious. At the same time, market competition has also intensified the momentum of cost decline. This year, we will make great efforts to reduce the pressure on high cost deposits, including negotiated deposits, structured deposits, and certificates of deposit with a term of more than three years. We have set some reasonable growth goals, and will have appropriate control over the proportion of these deposits. "
All kinds of banks explore the road of stable development
"Recently, some banks have reduced and adjusted the amount of large deposit receipts to better manage the cost of liabilities and the net interest margin. However, it is not ruled out that some regional small and medium-sized banks increase customer acquisition and deposit taking by moderately increasing large deposit receipts products." Everbright Bank Zhou Maohua, the financial market analyst, told the reporter.
stay Postal Savings Bank According to researcher Lou Feipeng, the reason why some regional banks have newly issued large deposit certificates and the interest rate is relatively high is that small and medium-sized banks lack advantages in attracting deposits and hope to absorb deposits by paying relatively high interest rates. Since this year, while the deposit has maintained a high growth rate, the scale of new deposits and year-on-year growth rate are lower than last year. In this case, it is more likely that deposits are unevenly distributed in different types of banks.
According to the data of the People's Bank of China, as of the end of March, the balance of RMB deposits was 295.51 trillion yuan, up 7.9% year on year. "Since last March, the deposit growth rate has entered the downward channel. By sector, residents and enterprises both achieved year-on-year growth in the first quarter." Cinda Securities Macro team analysis said.
Ren Tao said that national banks have the advantages of network coverage, customer base and so on. They do not need to excessively "mark up" to attract deposits, but can remain rational in the aspect of attracting deposits according to the strategy of debt following. By improving the service level, improving the internal assessment mechanism, enriching the optional configuration varieties, optimizing the market-oriented debt and deposit structure and other ways, the "six nature" goals, such as the stability of debt sources, the diversity of debt structures, the rationality of debt and asset matching, the initiative of debt acquisition, the appropriateness of debt costs, and the authenticity of debt items, can be achieved.
In Ren Tao's view, compared with national banks, the advantages of regional banks are mainly reflected in pricing, but they need to balance the cost of debt and the ability to attract deposits, so as to avoid falling into the vicious circle of "attracting deposits with high interest rates - narrowing interest margin - increasing liquidity pressure". Specifically, we can consider taking the road of differentiated competition by improving the contribution of market-oriented liabilities, strengthening cooperation with high-quality financial institutions to enrich configurable varieties, moderately slowing down the pace of scale expansion to ease the pressure of collecting reserves, providing more high-quality services to maintain the relationship with existing customers, strengthening the cooperation ties with local strategic customers, and so on.
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