Original Liu Xiaobo
While this month's LPR (Loan Market ** Rate) remains unchanged, butMajor banks have lowered their deposit rates from today!
The four major state-owned banks of industry, agriculture, China, and construction are the four major state-owned banks that took the lead in lowering interest rates on deposits, so today's signal of deposit interest rate cuts is of strong significance.
The specific rate cut is:
The listed interest rate of one-year and less lump sum deposit and withdrawal time deposit will be reduced by 01%, the listed interest rate of two-year lump sum deposit and lump sum time deposit was reduced by 0.2%, and the listed interest rate of three-year and five-year lump sum deposit fixed deposits will be reduced by 025%。Some banks' large-denomination certificates of deposit have also been adjusted, with a maximum reduction of 30bp.
The following figure is the deposit interest rate announced on the official website of ICBC from today:
The interest rate on a 5-year lump sum deposit has fallen to 20%, and the 3-year fell below 2%%.
The following figure shows the deposit interest rate standard implemented by ICBC after the interest rate adjustment on September 15, 2022:
At that time, the interest rate of the 5-year lump sum deposit was 265% with a 3-year term of 26%, which is 65 basis points higher than the latest interest rate now.
Over the same period, the LPR (Loan Market ** Rate) rate cut was much less than 65 basis points.
As can be seen from the chart below, the 1-year LPR rate cut has accumulated 20 basis points since September last year, and the 5-year LPR rate cut has only 10 basis points.
Why did the lending rate fall by only 10 to 20 basis points, while the deposit rate was reduced by 65 basis points?
There are three main reasons for this:
First, the central bank has continued to implement targeted interest rate cuts on real estate loans, especially personal housing loans, in the past two years, and the real rate cut is greater than that of the LPR interest rate cut.
According to the data of the central bank's third-quarter monetary policy implementation report, the weighted average interest rate of new personal housing loans issued in September this year was 402%, which is significantly lower than the benchmark interest rate of LPR for 5 years and above 42%。
Second, this year was the second time in history that the "additional discount" on existing mortgages was completed (the last time was in 2009).
According to the data of the central bank, as of the end of September 2023, more than 22 trillion yuan of existing mortgage interest rates have been reduced, and the adjusted weighted average interest rate is 427%, with an average reduction of 73 basis points, reducing borrowers' interest expenses by 160 billion to 170 billion yuan per year, benefiting about 50 million households, 1500 million people.
Third, the state has recently increased its support for the financing of real estate enterprises, proposing to "actively and prudently resolve real estate risks, and meet the reasonable financing needs of real estate enterprises of different ownership systems without discrimination". This means that bad debts in the financing of real estate companies are likely to rise.
In this way, major banks will face pressure to increase profits from the second half of 2023 to next year.
The banking sector is the cornerstone of financial stability. Banks must not only pay dividends to shareholders every year, but also replenish their capital in a timely manner in line with the growth of deposits, and if profits cannot be maintained at a certain level, financial security will be threatened.
In this case, a reduction in deposit rates is inevitable.
And as the LPR rate falls further next year, the deposit rate will be lowered.
What is its essence?In fact, it is to let people who love savings, do not buy houses, do not consume, and do not invest to subsidize those who buy houses, invest people, and consume people.
In the economic downturn, those who dare to buy, invest, and consume are the ones who should be encouraged and must be encouraged.
This is not only true for China, but for any country.
The chart below shows the "annual increase in household deposits" in recent years
It can be seen that in 2022, there was a "revenge savings", and household deposits soared by 17 in one year84 trillion.
This year, the momentum has waned. By the end of November, 14 new household deposits will be added in 20237 trillion. This is closely related to the continuous reduction of interest rates on deposits.
By November, the balance of household deposits nationwide reached 1359 trillion.
Four years ago (November 2019), on the eve of the outbreak, the national household deposit balance was only 804 trillion.
In just four years, household deposits (household savings) have increased by nearly 70%!
Let this 135Only by coming out of the 9 trillion "sleeping tigers in the cage" can the economy be revitalized and deflationary expectations can be broken. Deposit interest rate cuts can play this role.
Therefore, this deposit interest rate cut can be described as killing multiple birds with one stone, which not only reduces the "risk-free interest rate" of the whole society, which is conducive to improving investment and consumption desire, but also hedges the risks faced by the banking industry, stabilizes the cornerstone of A-shares (bank stocks), and makes room for further interest rate cuts in loan interest rates in 2024.
At present, the year-on-year growth rate of M2 (the rate of printing money) is 4% faster than the growth rate of GDP (the rate of wealth creation).8 percentage points. This means that the real rate of depreciation of the currency is 48%。
Compared to CPI, a fixed deposit rate of 2% or less looks like a positive returnHowever, compared with the "M2 year-on-year growth minus GDP year-on-year growth" (which can be seen as the overall inflation rate), it is a negative return.
People who are keen on saving are increasingly subsidizing those who buy houses, invest and consume.