Several small and medium-sized banks announce deposit rate cuts

Gelonghui March 9 | According to CCTV Finance, since March of this year, many small and medium-sized banks such as Liaoning Revitalization Bank, Heilongjiang Youyi Rural Commercial Bank, and Shanghai Songjiang Fuming Village Bank have lowered deposit interest rates. The adjustments include demand deposits and fixed-term products of various maturities. Notably, after this adjustment, some small and medium-sized banks have experienced an inverted yield curve between short-term and long-term deposits. For example, Heilongjiang Youyi Rural Commercial Bank’s latest five-year fixed deposit interest rate is 1.6%, lower than its three-year fixed deposit rate of 1.75%. Journalists also noticed that before this round of rate cuts among small and medium-sized banks, some large banks, including China Construction Bank, also had inverted deposit product rates. Experts analyze that the recent rate cuts by small and medium-sized banks are a strategy to stabilize net interest margins under the current moderately loose monetary policy. The inverted deposit rates reflect banks’ detailed liability management. Industry insiders suggest that, given the push to lower overall social financing costs and the pressure on banks’ net interest margins, banks may continue to lower deposit interest rates.