Interest rate cuts! Multiple small and medium-sized banks are taking coordinated action!

At the beginning of April, many small and medium-sized banks announced reductions in their deposit listing interest rates, with decreases ranging from 5 to 30 basis points.

Multiple banks act intensively

Xiamen Bank announced that starting April 1, the listed interest rates for several deposit products will be adjusted. After the adjustment, the bank’s annualized interest rates for 1-year, 3-year, and 5-year fixed deposits will be 1.2%, 1.4%, and 1.4%, respectively, down 10, 20, and 20 basis points from before; at the same time, the bank notified that the annualized interest rate for demand deposits (one day) was lowered by 5 basis points to 0.65%.

Jilin Bank only lowered the listed interest rate for a fixed deposit product: starting April 1, the annualized interest rate for its fixed deposit of three years (lump sum deposit) was reduced from 1.75% to 1.7%, a decrease of 5 basis points, but there remains a 10 basis point “inversion” compared to the bank’s 5-year fixed deposit annualized rate of 1.6%.

Fujian Haixia Bank adjusted the listed interest rates for Renminbi negotiated deposits and notice deposits. Starting April 1, the negotiated deposit rate (Fujian Province) was lowered by 5 basis points to 0.6%; the one-day and seven-day notice deposit rates (Fujian Province) were each reduced by 10 and 20 basis points to 0.6% and 0.9%, respectively.

In addition to city commercial banks, many rural commercial banks and village banks have also joined this round of rate cuts, including Hubei Jiangling Rural Commercial Bank, Jilin Huanjiang Rural Commercial Bank, Hui County Pearl River Village Bank, etc.

Among them, Hui County Pearl River Village Bank lowered the interest rates for fixed deposits of 1 year, 2 years, 3 years, and 5 years. For example, for a 1-year deposit, the pre-adjustment annualized rate was 1.36% for deposits below 10,000 yuan and 1.51% for deposits above 10,000 yuan; after the adjustment, both are 1.21%, with a maximum decrease of 30 basis points.

Industry focuses on liability cost control

Wang Pengbo, Chief Analyst at Broadcom Consulting, pointed out that the rate cuts by many small and medium-sized banks are due to the end of the “opening red” period, and the banking industry needs to refocus on liability cost management. At this time, lowering deposit rates can help reduce deposit costs and optimize the liability term structure.

Dong Ximiao, Chief Economist at Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory, also pointed out that to attract deposits and stabilize liabilities, small and medium-sized banks may temporarily raise deposit rates at key moments such as the “opening red” period to attract new funds and retain old customers. This is also a direct way to respond to deposit competition and meet performance targets.

From the recent annual reports of many listed banks, liability cost management has become a key measure for industry “stabilizing interest margins,” with effective stabilization of industry interest margin declines.

Guotai Haitong Securities team report noted that thanks to the narrowing of interest margin declines and the recovery of mid-term income, the performance growth of listed banks in 2025 is expected to improve marginally.

CITIC Bank Chairman Fang Heying stated at the earnings conference that a major highlight for CITIC Bank in 2025 will be the balanced management of the volume and price of liability business, “which drives our liability cost to truly build a ‘buffer zone’ against the impact of low interest margins.” He mentioned that the bank will more effectively control “high-cost liabilities” in 2025, with the combined proportion of three-year, structural, and negotiated deposits below 32%, maintaining a reasonable structure that provides a clear funding cost advantage.

The recent rate reductions by small and medium-sized banks mainly focus on high-cost deposit products such as 3-year and 5-year deposits. “It is expected that more small and medium-sized banks will follow suit and lower the annualized interest rates of high-cost deposit products,” Wang Pengbo said.

Dong Ximiao emphasized that for banks to achieve long-term steady development, the core lies in strategically breaking free from dependence on short-term scale surges, and through reform of incentive and constraint mechanisms, to transmit this strategy to the grassroots level. Turning the “opening red” from a short-term marketing campaign into a natural starting point for the bank’s year-round service and value creation for customers, ultimately achieving a dynamic balance of scale, efficiency, and quality.