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Several private banks buck trend by raising deposit rates; WeBank lifts 3-year rate by 15 bps
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According to a Cailian Press report on September 18, several Chinese private banks have raised interest rates on certain deposit products, diverging from the mainstream banking industry trend of cutting deposit rates and withdrawing medium- and long-term deposit products due to narrowing net interest margins. WeBank increased its three-year deposit rate by 15 basis points from 1.6% to 1.75%, creating an inverted yield curve where the five-year rate (1.6%) is lower than the three-year rate. Other private banks, including Su Shang Bank, have reintroduced medium- and long-term deposit products, issuing five-year large-denomination certificates of deposit at 1.85% and three-year CDs at 1.95%. This follows a period in June when multiple private banks—including Beijing Zhongguancun Bank, Hunan Sanxiang Bank, and Yilian Bank—had withdrawn five-year fixed deposits. Finance professor Tian Lihui from Nankai University stated that these counter-trend adjustments represent phased and structural operations, but noted that reducing high-cost liabilities remains the prevailing strategy across the banking sector due to shrinking net interest margins.
Source report
According to a Cailian Press report on September 18, recent years have seen cutting deposit rates and withdrawing medium- and long-term deposit products become mainstream trends in the banking industry, driven by pressure from narrowing net interest margins. However, reporters have recently found that several private banks have raised interest rates on certain deposit products.
WeBank increased its three-year deposit rate by 15 basis points, from 1.6% to 1.75%. The bank's latest annual interest rates for fixed deposits with lump-sum withdrawal at maturity are as follows:
- Five-year term: 1.6%
- Three-year term: 1.75%
- Two-year term: 1.6%
- One-year term: 1.5%
- Six-month term: 1.3%
- Three-month term: 1.1%
Notably, an inverted yield curve has emerged between the five-year and three-year fixed deposit rates.
Additionally, several other private banks have reintroduced medium- and long-term deposit products. For instance, Su Shang Bank recently issued large-denomination certificates of deposit (CDs) with a five-year term at an interest rate of 1.85% and a three-year term at 1.95%.
Previously, in June, multiple private banks—including Beijing Zhongguancun Bank, Hunan Sanxiang Bank, and Yilian Bank—had withdrawn five-year fixed deposits and other similar products.
Tian Lihui, a finance professor at Nankai University, stated that the recent counter-trend adjustments to deposit products by several private banks represent phased and structural operations. Nevertheless, constrained by shrinking net interest margins, reducing high-cost liabilities remains the prevailing strategy across the banking sector.
(Source: CCTV Finance)
Source
财联社Eastern
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Chinese private banks raise deposit rates, bucking industry-wide cuts trend