Obtain the full version of "Banking Industry Investment Strategy Report: Focus on Follow-up Deposit Interest Rate Changes ", please pay attention to the green letter official account: vrsina, backstage reply "Finance", the report number is 20bg0059.
[Summary of Research Report]
April LPR quotation is adjusted down by 20BP: After this LPR quotation is reduced, the spread of 5-year LPR to MLF interest rate has reached 170 BPs, while the corresponding 1-year spread is still maintained at 90 BPs. From the perspective of banks, short- and medium-term loans are mostly corporate liquidity loans and loans to small and medium-sized enterprises. The rapid decline in the quoted interest rate can not only quickly reduce short-term financing costs, but also solve the problem of expensive small and medium-sized financing; long-term credit mainly Concentrated on real estate-related financing, infrastructure investment and some manufacturing investments. The relatively low drop rate can guide banks to increase investment in medium and long-term loans, adjust loan structures, and ease the downward pressure on asset-side yields. In addition, it can also increase Capital support for infrastructure investment, while further implementing the central government’s policy of “no speculation in housing and housing”.
The next step is to pay attention to the adjustment of deposit interest rates: the recent Politburo meeting put forward specific requirements on monetary policy, emphasizing “use of measures such as RRR cuts, interest rate cuts, and refinancing to maintain reasonable and sufficient liquidity, guide loan market interest rates down, and save funds Used to support the real economy, especially small, medium and micro enterprises." We expect that in addition to further lowering the interest rates of OMO, MLF, and LPR, there is a high probability that the adjustment of the benchmark interest rate of bank deposits will also start. Judging from the promotion and implementation of the current monetary policy, banks' net interest margin is facing certain pressure in the short term. Judging from the current bank data of the company’s 2019 financial report, the average cost of banks’ liabilities is 2.34%. Although it is 4BP lower than that in 2018, the cost of stable funds on the liabilities side, that is, the cost of deposits, has risen in varying degrees. The average cost of deposits at the end of 2019 is 2.04%, an increase of 16BP over 2018. The rigidity of the cost on the liability side and the solidification of the structure will cause a significant reduction in profits during the downward cycle of interest rates.
