autoroulettelapartage| Interest margin levels have collectively declined, and listed stock banks have launched "two battles"

Securities Times reporter Liu Xiaoyou and Zhang Yanfen

There are multiple commonalities in the debt management of a number of listed stock banks, including the intensification of retail "deposit maturity", the rise of deposit absorption costs, the general decline of net interest income, and so on.

Under the superposition of these factors, the interest spread level of share banks is collectively downward. By the end of 2023, there is evidence to check.AutoroulettelapartageIn the camp of share banks, only China Merchants Bank, Ping an Bank and Zhejiang Merchants Bank stand above the 2% spread line.

In this context, the joint-stock banks started the "two wars"-the war of interest spread protection and the war of interest rate pressure reduction.

Fixed acceleration of retail deposits

The "demand decline, regular rise" of debt-side retail deposits is evident in the annual reports of a number of shares, which is also a "fixed deposit" challenge repeatedly mentioned by brokerage analysts.

Compared with the data at the end of 2022 and the end of 2023, the proportion of retail demand deposits in China Merchants Bank is 26%.Autoroulettelapartage.32% dropped to 22%Autoroulettelapartage.43%, the proportion of retail time deposits increased from 41.19% to 42.85%. The proportion of individual demand deposits in Societe Generale decreased from 8.23% to 7.34%, while the proportion of individual time deposits increased from 14.69% to 19.06%. The proportion of individual demand deposits in Citic Bank fell from 6.8% to 6.2%, while the proportion of individual regular deposits increased from 18.3% to 20.6%. The proportion of retail demand deposits at Everbright Bank fell from 6.49% to 6.09%, while the proportion of retail time deposits increased from 20.6% to 23.08%. The proportion of individual demand deposits in Minsheng Bank dropped from 7.25% to 6.91%, while the proportion of individual time deposits increased from 18.3% to 21.26%.

In its 2023 annual report, China Merchants Bank said bluntly that it would continue to face the pressure of scale growth and cost control, and stressed the need to adhere to the core deposit-based promotion strategy. expand stable low-cost deposits through settlement services, wealth management and product innovation. Societe Generale also said in its annual report that it is necessary to "resolutely fight against interest spreads", persist in reducing debt costs as the key to stabilizing interest spreads, and constantly increase the efforts of low-cost time deposits to replace high-cost agreement deposits and structural deposits.

In addition, according to a reporter from the Securities Times, many banks have indicated that they will or have actually started to increase the pressure on high-cost deposits, including reducing the cost and supply of agreed deposits, structured deposits, and large certificates of deposit for more than three years.

The deposit cost rate rises.

Although the banking industry has completed many rounds of large-scale deposit interest rate cuts since 2022, it is still difficult for many banks to reduce deposit interest rates. Judging from the public data, the average cost rate of deposits absorbed by a number of banks is rising.

Deposit costs of China Merchants Bank, Everbright Bank, Minsheng Bank, Ping an Bank and CITIC Bank rose to varying degrees in 2023. Specifically, Everbright Bank's average cost rate of customer deposits is 2.32%, up 0.02 percentage points from the same period last year. This was followed by Minsheng Bank, which had an average customer deposit cost rate of 2.31% last year, up 0.02 percentage points from the same period last year. The average cost rate of Ping an Bank's customers' deposits was 2.20%, up 0.11 percentage points from the same period last year. The average cost rate of Citic Bank's customers' deposits was 2.12%, up 0.06 percentage points from the same period last year.

China Merchants Bank was the only joint-stock bank with an average deposit cost rate of 1.62% at the end of 2023. According to the breakdown, the average cost rate of public deposits of China Merchants Bank is 1.76%, while that of retail customers is only 1.42%. It is important to note that the bank's deposit costs have been falling for many years, but from 2022, deposit costs began to rise, rising 10 basis points year-on-year in 2023.

However, if you only look at RMB deposits, the interest payment rates of RMB deposits in many banks are falling. Taking the behavior of the three shares as an example, the average cost rate of RMB customer deposits in China Merchants Bank dropped by 4 basis points compared with the same period last year, Ping an Bank's RMB deposit cost rate dropped by 9 basis points compared with the same period last year, and the interest payment rate of RMB deposits in Industrial Bank dropped by 11 basis points year on year. The increase in the overall deposit cost rate is mainly affected by factors such as a sharp rise in interest rates in the foreign currency market.

At present, the only joint-stock bank with a declining deposit cost rate is Zheshang Bank. Deposit growth at the bank remained in double digits in 2023, but interest-paying costs were falling against the trend. Data show that at the end of 2023, the bank's average daily balance of deposits was 1.77 trillion yuan, an increase of 10.27 percent over the previous year; at the same time, the average interest payment rate of deposits in 2023 was 2.24 percent, down 5 basis points from the previous year.

"lowering interest rates is the fastest way to achieve revenue and no capital consumption, but it is also the most difficult way." At the 2023 annual performance presentation meeting of Zhejiang Merchants Bank, Zhang Rongsen, president of the bank, said that it is very difficult from the implementation of the strategy to the final achievement of the goal.

"AutoroulettelapartageWe are going to start a campaign to reduce the interest rate. " Zhang Rongsen revealed that in terms of interest payment rate, Zhejiang Merchants Bank has reduced its interest rate by nearly 40 basis points in recent years, and if calculated on the basis of 2 trillion yuan in deposits, it will pay 6 billion to 8 billion yuan less a year, thus reducing financial costs. In recent years, the bank has cut down nearly 400 billion yuan in high-interest deposits and absorbed nearly 1 trillion yuan in low-interest deposits.

General decline in net interest income

The general decline in net interest income is a thorny problem faced by many listed stock banks. Judging from the several listed stock banks that released the data, only Industrial Bank and Zheshang Bank increased in 2023, rising 0.85% and 0.99% respectively compared with the same period last year, and the net interest income reached 146.503 billion yuan and 47.528 billion yuan respectively.

It is worth noting that the largest decline in net interest income and the smallest absolute amount was Bohai Bank, a listed bank in Hong Kong shares, which fell by 22.16% to 17.646 billion yuan.

According to the ranking of net interest income, the top three banks are: China Merchants Bank 214.669 billion yuan, down 1.6% year-on-year; Industrial Bank 146.503 billion yuan, up 0.86% year-on-year; Citic Bank 143.539 billion yuan, down 4.72% from the same period last year.

The decrease in net interest income is related to the downward core of the net interest margin. As of press time, of the 23 A-share listed banks that have published their 2023 results, only 7 have maintained their net interest margin above 2 per cent, compared with 21 at the end of 2022. In other words, 14 banks fell off the 2% spread line last year.

Specifically, the composition of the 7% interest spread camp: among the major state-owned banks, there is only one Postal savings Bank; three joint-stock banks, namely Ping an Bank, China Merchants Bank and Zhejiang Merchants Bank; and three regional banks, including Zhengzhou Bank, Jiangyin Bank and Changshu Bank. It is worth mentioning that the highest net interest margin is Changshu Bank, which reached 2.86%.

From the perspective of stock banks, Ping An Bank's net interest margin was 2.38%, the highest among the eight joint-stock banks, down 0.37 percentage points from the previous year; Bohai Bank had the lowest net interest margin, which was 1.14%, down 0.36 percentage points year-on-year. These two banks are also the two banks with the highest changes in net interest margins among the eight banks.