Banks Likely To Cut Deposit Rates Further

Banks will likely continue to lower the deposit rates to offset the squeeze on asset-side pricing caused by reductions in existing mortgage rates and resolving local-government implicit debts, said Wang Yifeng, chief banking analyst at Everbright Securities. The latest round of deposit interest-rate cuts will have limited impact on bank liability costs in 2024 and the upper limit of deposit rate self-discipline may be lowered in Q1, Wang said. Many small- and medium-sized banks have begun to follow major state-owned bank deposit-rate cuts, ranging from 5-45bp, since 2024. (Source: Yicai.com)