Multiple small and medium-sized banks cut interest rates, mainly targeting their high-cost products.

The Securities Times reporter Lin Yu

At the beginning of April, several small and medium-sized banks announced a cut to their deposit posted rates. The reduction varies from 5 to 30 basis points.

Xiamen Bank said in its announcement that, starting from April 1, the posted rates of multiple deposit products will be adjusted. After the adjustment, the annualized interest rates for one-year, three-year, and five-year fixed-term deposits will be 1.2%, 1.4%, and 1.4%, respectively, representing decreases of 10, 20, and 20 basis points compared with before the adjustment. At the same time, the bank also notified that the annualized interest rate of its deposit (one day) has been cut by 5 basis points to 0.65%.

Jilin Bank has only cut the posted rate of one fixed-term deposit product. Starting from April 1, the annualized interest rate for its three-year fixed-term deposit (lump-sum deposit and lump-sum withdrawal) will be lowered from 1.75% to 1.7%, a reduction of 5 basis points. However, it still shows a “inversion” of 10 basis points versus the bank’s five-year fixed-term deposit annualized interest rate of 1.6%.

Fujian Strait Bank, meanwhile, adjusted the posted rates for renminbi call deposits and notice deposits. Starting from April 1, the bank’s call deposit rate (Fujian) was lowered by 5 basis points to 0.6%. The notice deposit rates for one day and seven days (Fujian) were lowered by 10 and 20 basis points to 0.6% and 0.9%, respectively.

In addition to city commercial banks, several rural commercial banks and township banks have also joined this round of rate cuts, including Hubei Jiangling Rural Commercial Bank, Jilin Hunjiang Rural Commercial Bank, and Yuanshui? Hui County Zhijiang Township Bank, among others.

Among them, Hui County Zhijiang Township Bank adjusted the interest rates of its one-year, two-year, three-year, and five-year products for deposits with fixed terms (lump-sum deposit and lump-sum withdrawal). Taking the one-year term as an example, before the adjustment, the annualized interest rate for deposits below 10,000 yuan was 1.36%, and for those above 10,000 yuan was 1.51%. After the adjustment, both are 1.21%, with a maximum drop of 30 basis points.

“After ‘Prosperous Opening’ ends, the banking industry needs to re-focus on managing deposit costs. At this time, choosing to lower deposit rates can reduce deposit costs and optimize the deposit maturity structure.” Wang Pengbo, Chief Analyst at Boto Consulting, told The Securities Times reporter.

Dong Shimiao, Chief Economist of China UnionPay? China Merchants? (Zhaolian) and Deputy Director of the Shanghai Finance and Development Laboratory, also noted that to absorb deposits and stabilize liabilities, small and medium-sized banks may raise deposit interest rates in stages at key time points such as “Prosperous Opening,” in order to attract new funds and retain existing customers. This is also a direct approach to respond to deposit competition and complete performance assessments.

Judging from the annual reports recently published by multiple listed banks, liability-cost management has become a key measure for the industry to “stabilize the net interest margin.” It has effectively helped keep the decline in the net interest spread from worsening. A research report released by Ma Tingting’s team at Guotai Haitong Securities pointed out that, benefiting from the narrowing decline in the net interest spread and the warming up of fee income, the growth rate of listed banks’ performance in 2025 showed marginal improvement.

Taking China CITIC Bank as an example, at the earnings call, the bank’s Chairman Fang Ying said: “Liability business volume-price balanced management is a major operational highlight for 2025. It drives our deposit costs to truly build a ‘wide buffer zone’ to withstand the impact of a low net interest spread.”

He added that in 2025, China CITIC Bank’s “controlling high-cost liabilities” is even more powerful and effective. The combined proportion of three-year term, structured deposits, and agreement deposits is below 32%, and a relatively reasonable liability structure has brought clear advantages in funding costs.

This round of deposit rate cuts by small and medium-sized banks is also concentrated in higher-cost products such as three-year and five-year terms and call/notice deposits. “We expect that more small and medium-sized banks will follow by cutting the annualized interest rates on high-cost deposit products.” Wang Pengbo said.

Dong Shimiao believes that for banks to achieve long-term, steady development, the core is to break, from a strategic standpoint, the path dependence on pursuing short-term scale growth. Through reforms to incentive and constraint mechanisms, this strategy should be transmitted to the grassroots level, turning “Prosperous Opening” from a short-term marketing campaign into a natural starting point for banks to serve customers throughout the year and create value, ultimately achieving dynamic balance among scale, efficiency, and quality.

(Editor: Qian Xiaorui)

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