The media said that after the government rectified the banking industry's manipulation of deposit figures and used "improper" means to absorb deposits, the decline in deposits of China's major banks may affect credit growth and hinder the government's efforts to revive the economy.

According to a report on the Bloomberg News website on October 10, among the five major banks, ICBC, Agricultural Bank, Bank of China, and Bank of Communications announced a decline in deposits in the third quarter report, and only China Construction Bank achieved an increase in deposits. Central bank data show that deposits in the banking sector declined in the third quarter for at least the first quarter since 31.

Since the bank’s loan ratio must not exceed 75% of the deposits held at the end of the quarter, the decline in deposits is likely to force banks to compress credit. If the continuous decline may hinder the government’s economic recovery work.

Julian Evans-Prichard, an economist at Capital International Macroeconomics Consulting in Singapore, said: “Now it’s not so easy for banks to bludgeon deposit figures. To meet the loan-to-deposit ratio, some banks will have to cut their loans. Scale. The tightening of bank supervision has also affected their credit growth."

According to reports, in September of this year, the China Banking Regulatory Commission issued regulations restricting the large fluctuations in bank deposits and prohibiting “improper means” such as rebates and illegal increases in interest rates.

Barclays Bank analyst Yan Meizhi said in October that the new regulations may gradually weaken the growth momentum of deposits and loans in the coming months.

Data shows that the quarterly decline in RMB deposits is unusual. According to data from the People's Bank of China, China's banking deposits decreased by 9500 billion yuan in the third quarter to 112.7 trillion yuan, the first time since 1999.

Jim Antos, an analyst at Mizuho Securities Asia Ltd. in Hong Kong, said: “The low growth in deposits is an accurate indicator of the free cash flow of consumers and businesses. The situation looks negative.”

Deposits fall into the "new normal", banks both soft and hard to prevent "moving"

China Economic Net

The third quarterly report of the 16 A-share listed banks ended flatly a few days ago. Although nearly 10% of the net profit growth rate is basically in line with expectations, some potential uneasy factors in the third quarterly report data still make the market a little worried. According to statistics, as of the end of the reporting period, the total bank deposits of 16 listed banks were 75.62 trillion yuan, a decrease of 77.13 trillion yuan from the 1.5 trillion yuan reported in the middle of this year, a decrease of 1.97%. Compared with the 2013 trillion yuan at the end of 70.42, the increase was only 7.38%.

As we all know, deposits have always been the foundation of Chinese commercial banks. Now the accelerated loss of bank deposits has become a major concern that restricts the performance growth of listed banks. Under pressures such as the slowdown in deposit growth and the aggressive “absorption” of Internet finance, the former “told” commercial banks had to put down their stance, adjust their business structure, and deploy Internet finance to restore their decline. At the same time, many experts and insiders in the banking industry believe that the decline in bank deposits has become a "new normal", which will limit the supply of bank credit to a certain extent. They call on the supervisory authorities to further relax the loan-to-deposit ratio indicators.

Bank of Communications' deposits grew negatively from the beginning of the year

Political Commissar Lu, chief economist at Industrial Bank, pointed out that the decline in bank deposits has become a "new normal." "Under the marketization of interest rates, one of the biggest'new normals' is the problem of deposit loss faced by banks. In the ten years since 2003, the proportion of deposits in bank liabilities of China has continued to decline, from the highest level of 84% in the past. Up to now about 76%. At the same time, various types of investment and wealth management have risen rapidly. Funds, brokerage asset management, insurance asset management, trust, bank wealth management, etc. total 38.8 trillion yuan, equivalent to 40% of bank deposits. All of them Has become a strong competitor for bank deposits."

As early as this year's mid-year report, weak growth in bank deposits was already evident. By the time of the third quarterly report, bank deposit growth had almost "fallen across the board." Except for banks such as Ping An, Ningbo, Shanghai Pudong Development, Minsheng, China Merchants, and Nanjing, the balance of deposits of the remaining nine listed banks were only single-digit growth compared to the end of the previous year. The Bank of Communications' deposit balance at the end of the third quarter was even "negative growth" compared to the end of the previous year.

According to data from the third quarterly report, the scale of customer deposits of China CITIC Bank was 28757.25 billion yuan, an increase of 8.45% from the beginning of the year. At the end of the third quarter, the scale of deposits fell by 1774.88 billion yuan, and the loan-to-deposit ratio increased by 4.2% to 73.6%. The deposit balance of Everbright Bank at the end of the third quarter was 17282.79 billion yuan, of which the time-reported deposit balance was 17962.82 billion yuan, and the deposit balance at the end of the third quarter fell by 680 billion yuan. The deposit scale of Industrial Bank at the end of the third quarter was 22052.28 billion yuan, and the deposit scale at the end of the quarter fell by 412.94 billion yuan, a decrease of 1.8% from the previous quarter. The bank's interbank assets decreased by 953 billion yuan in the third quarter, a ring down 8.0%.

Analysts pointed out that the slowdown in bank deposit balance growth is related to the control of balance fluctuations by the regulatory authorities. In early September, the Central Bank, the Ministry of Finance, and the China Banking Regulatory Commission jointly issued the "Notice on Strengthening the Management of Deposit Deviation Degrees in Commercial Banks" (hereinafter referred to as Circular 9), requiring commercial banks to strengthen deposit stability management, and the deposit deviation degree at the end of the month should not exceed 236 %, otherwise, corresponding supervisory correction and punishment measures will be taken according to the severity.

Taking China Construction Bank as an example, data from the bank’s third quarterly report showed that group deposits at the end of September were 9 billion yuan, an increase of 129824% from the beginning of the year and an increase of 6.21% from the end of June. Excluding the factor of overseas deposits, there was zero growth in domestic deposits. Affected by the deposit deviation policy introduced by the regulatory agency, deposits did not increase in the third quarter. Brokerage analysts told reporters, "It is expected that with the adjustment of the maturity structure of wealth management products, the growth of CCB's deposits in the fourth quarter of this year is still not optimistic. The weak growth of deposits as the main source has also restricted the expansion of the balance sheet."

Love and hate interweave banking wealth management

For commercial banks that used to "lay down and make money" in the past, even though they had expected it before, they did not expect the growth of deposits to decline so fast. As a last resort, in order to prevent deposits from "moving", banks have to "do both soft and hard."

Whether it is the higher income of wealth management products or the bank version of "Baby" products, it shows that the "Tsundere" banks are constantly lowering and softening their posture. A joint-stock banker told a reporter from the China Securities Journal: "Since this year, the cost of obtaining funds for banks has been rising. Now the annualized expected yield of some wealth management products is higher than the previous 7% mortgage interest rate. But in order to retain deposits. , This wealth management product just wants to stop but dare not stop."

At the same time, commercial banks have to accelerate the pace of "innovation" for deposits and actively deploy Internet finance. At the just-concluded 1.54th Beijing Golden Expo, the "Direct Selling Service Experience Hall" of Bank of Beijing [-XNUMX% Capital Research Report] attracted a lot of people "onlookers." The direct bank account opening and signing service is extremely simple and can be completed quickly through the remote signing machine deployed on site, and the entire process takes only three minutes. Bank of Communications strongly promoted the "visual bank card" at the Expo. There is no need to log in to online banking or go to bank outlets. The electronic paper screen of the card can display the electronic cash account balance offline in real time. Users only need to tap To display the current balance. A reporter from China Securities News interviewed many ordinary depositors at the scene and found that these innovative methods of banks not only evoked the “curious psychology” of attracting depositors, but also might have retained deposits to a certain extent.

It is worth noting that in the third quarterly report, almost all listed banks mentioned the layout of Internet finance, and some banks with earlier layouts have tasted the "big sweetness". Among them, Ping An Bank [0.73% Fund Research Report ] Especially obvious. Brokerage analysts pointed out that Internet financial models such as Direct Bank, WeChat Bank, and Pocket Community Bank have become an effective extension of Ping An Bank’s physical outlets, bringing substantial growth in deposits. According to data from the third quarterly report, Ping An Bank’s deposit balance reached RMB 15,081.79 billion, an increase of 23.93% from the beginning of the year. Among them, corporate deposits were 12,619.50 million yuan, an increase of 25.53% from the beginning of the year; retail deposits were 2,462.29 million yuan, an increase of 16.33% from the beginning of the year.

On the other hand, in order to prevent the "big move" of deposits, many commercial banks have to resort to hard and heavy moves. Earlier, some media broke the news that many major banks have closed the POS mechanism money transfer business port of joint-stock banks to strictly prevent deposits from moving. In addition, many banks impose restrictions on the single amount of funds collected by Super Online Banking. An account manager of Minsheng Bank [-1.09% Capital Research Report] told reporters, “In the case of current deposit loss, preventing the loss of deposits is still an important task of the bank. Some major banks have closed our ports, but we The transfer function is still normal."

For Internet "babies" who are "big money-suckers", the above-mentioned bank quota limits are also "tighter and tighter." A reporter from China Securities News found in WeChat Licaitong’s purchase limits for banks that currently 14 banks that support Licaitong purchases have set limits. Among them, with the exception of ICBC, Bank of Communications, Shanghai Pudong Development Bank, Ping An, etc., the single-day limit is 5 yuan, the other banks have a single-day limit of less than 3 yuan, and the Industrial Bank has a single-day limit of 5000 yuan. In addition, ICBC, China Construction Bank, Shanghai Pudong Development Bank, Bank of Shanghai, etc. have single-month quota restrictions.

The call for adjustment of loan-to-deposit ratio is revived

No matter how the banks "both hard and soft", it is estimated that the downward trend in deposit growth may be difficult to effectively curb for a while. Therefore, the industry’s call for a loosening of the loan-to-deposit ratio has revived, saying, “If the supervisory authority does not make adjustments, the banks have very limited room to choose, which can be said to be “dancing in shackles”.

The Bank of Communications is under pressure to further increase its loan-to-deposit ratio due to the large loss of deposits. According to data from the third quarterly report, the bank's loan-to-deposit ratio reached 9% at the end of September (73.92% and 6% at the end of June and the end of the previous year), approaching the regulatory red line, and industry insiders expect this may restrict the bank's future credit growth. China Construction Bank is also facing the same "dilemma". The third quarterly report showed that the bank's loan-to-deposit ratio was under pressure. At the end of September, the loan-to-deposit ratio was 72.37%, an increase of 73.40 percentage points from the beginning of the year, which is close to the 9% regulatory line. The bank's loan placement capacity constitutes a constraint.

Lian Ping, chief economist of the Bank of Communications, said bluntly: “The reality is that the growth rate of deposits has obviously not kept up with the growth rate of loans. The assessment of the loan-to-deposit ratio has become increasingly difficult to comply with the principle of market-oriented resource allocation. The general trend." Under the assessment of deposit deviation degree, it is still difficult for banks to change their deposit pursuit behavior. Under this supervision, the difficulty in absorbing bank deposits may increase, and it does not rule out the possibility that the growth of staged deposits will further slow down and the cost of debt will not be effectively reduced, thereby limiting the ability of credit. He further pointed out that an important part of reducing financing costs lies in commercial banks, and commercial banks are currently facing a slowdown in deposit growth and rising capital costs. The 75% loan-to-deposit ratio assessment also limits the ability of commercial banks to issue loans. , Appropriate reform of the loan-to-deposit ratio will help the decline of loan interest rates.

In addition to phasing out the loan-to-deposit ratio, Political Commissar Lu, the chief economist of Industrial Bank, also suggested that the supervisory authorities should make changes in several aspects: one is to improve asset liquidity, that is, to promote the securitization of credit assets; the other is to improve the stability of the debtor and promote The development of interbank certificates of deposits has opened up large-value certificates of deposits directly oriented to enterprises and individuals; the third is to break the rigid payment. At present, there is a strong expectation of rigid redemption in the financial market, and its yield is more than ten times or even dozens of times the deposit interest rate, resulting in the lack of features of deposit security.

Commercial Bank Deposits Decline at the End of the Third Quarter

Source: China Securities Network

The stringent new regulations for the assessment of deposit deviation were firmly implemented overnight, at least in terms of data.

On September 9, the Central Bank, the Ministry of Finance, and the China Banking Regulatory Commission jointly issued the "Notice on Strengthening the Management of Deposit Deviation Degrees in Commercial Banks" (hereinafter referred to as Circular 12), requiring commercial banks to strengthen deposit stability management, and the deposit deviation degree at the end of the month should not exceed 236%, otherwise, corresponding supervisory correction and punishment measures will be taken according to the severity.

It is hard to imagine how embarrassed the bankers were in the middle and late September, but the attitude and results of their actions should satisfy the supervisors. A reporter from the Shanghai Securities News calculated the deposits of all listed joint-stock banks at the end of the third quarter, and showed that the balance of deposits at the end of the third quarter of the eight listed joint-stock banks declined without exception, and several of them fell by more than 9 billion.

China CITIC Bank is the bank with the largest quarter-on-quarter decline in deposits among the eight banks. The semi-annual report shows that the bank’s total customer deposits was 8 billion yuan, an increase of 30532.13% from the beginning of the year. By the end of the third quarter, the bank’s customer deposits amounted to 15.14 billion yuan, an increase of only 28757.25% from the beginning of the year. The scale dropped by 8.45 billion yuan, and the loan-to-deposit ratio increased by 1774.88% to 4.2%.

The second is China Merchants Bank. The semi-annual report shows that as of the end of the reporting period, the bank’s total customer deposits amounted to 34207.48 billion yuan. By the end of the third quarter, the bank had absorbed 32655.2 billion yuan in deposits, and the deposit scale at the end of the quarter dropped by 1552.28 billion yuan. . This caused its loan-to-deposit ratio to rise by 3.9pc to 73.0%.

Guotai Junan believes that China Merchants Bank is also affected by inter-bank supervision and the decline in consensual financing needs. At the end of the third quarter, inter-bank assets decreased by 31% from the previous quarter, resulting in a decrease of 2958 billion yuan in interest-bearing assets and a decrease of 5.9% from the previous quarter (increase by 15.1% in the second quarter). This impact will continue to exist, and the model of scale-driven performance growth may come to an end.

Shanghai Pudong Development Bank also showed a large decline at the end of the quarter. The bank’s semi-annual report showed that as of the end of the reporting period, the bank’s domestic and foreign currency deposit balance was 2.76 trillion yuan, an increase of 13.93% from the beginning of the year. The third quarter report showed that the bank’s third quarter end The total domestic and foreign currency deposits amounted to 2.69 trillion yuan, an increase of 11.11% over the end of the previous year. Judging from the scale at the end of the quarter, the scale of deposits has dropped by about 700 billion yuan.

China Everbright Bank is no exception. The semi-annual report shows that the bank's deposit balance as of the end of June was 6 billion yuan. By the end of the third quarter, the data was 17962.82 billion yuan, and the deposit balance at the end of the third quarter fell by 17282.79 billion yuan.

The Industrial Bank’s semi-annual report shows that the bank’s total deposits amounted to 22465.22 billion yuan. By the end of the third quarter, the bank’s deposit scale was 22052.28 billion yuan. At the end of the quarter, the size of deposits fell by 412.94 billion yuan, a decrease of 1.8% from the previous quarter. Before reducing the deposit scale at the end of September, the Industrial Bank also actively controlled the growth rate of its asset scale, and maintained a higher-than-expected increase in net interest margin by reducing the dilution of interbank assets. Data shows that the bank's interbank assets decreased by 9 billion yuan in the third quarter, a ring down 953%.

The deposit scale of Huaxia Bank at the end of the third quarter fell by 238 billion yuan from the previous quarter, and the deposit scale of China Minsheng Bank fell by 228.87 billion yuan from the previous quarter.

Ping An Bank appears to be a little different. Although its deposit scale at the end of the third quarter has also declined, its deposit scale at the end of the third quarter only dropped by 7.25 million yuan. CICC stated in its research report that the bank’s average daily deposits achieved a quarter-on-quarter growth of 6%.

A person from a joint-stock bank told reporters that at the end of last month, the head office of the bank issued a strict notice to the branches to strictly control the growth of deposits at the end of the quarter. Otherwise, the branch managers would be held accountable. "At that time, the pressure on the branch managers was definitely great. I dare not take the initiative to pull deposits, and try my best to ask customers not to make large deposits at the end of the season. If they have to make a deposit, they are advised to make changes by buying wealth management products."

Under the pressure of an iron fist, the bank effectively achieved a quarter-on-quarter decrease in the size of deposits at the end of the quarter and successfully achieved a healthy growth in average daily deposits. "At least, the index of deposit deviation is reached."

However, a senior executive of a joint-stock bank also told a reporter from the Shanghai Securities News that the policy of restricting deposit deviation may be "overcorrected", especially for some objective deposits at a time, and relevant opinions have been reflected to the supervisory authority.

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