Call deposits of stock banks float to the top when interbank certificates of deposit are forced to raise prices

category:Finance
 Call deposits of stock banks float to the top when interbank certificates of deposit are forced to raise prices


This week, 711.3 billion yuan of interbank certificates of deposit (CDS) expired, a new high since September 2018. The liquidity is under pressure due to the superposition of tax payment and treasury bond issuance.

But the RRR may not come. This year, medium term lending facility (MLF) operating rate and loan market quotation rate (LPR) remained unchanged for six consecutive months. Market analysis shows that the total easing represented by interest rate cut and reserve requirement reduction will not be increased.

It is particularly noteworthy that, after several days, the central bank raised the monetary gate again.

On October 21, Yi Gang, governor of the peoples Bank of China, pointed out at the annual meeting of the 2020 Financial Street Forum that monetary policy should properly control the general gate of money supply and properly smooth the fluctuation of macro leverage ratio so as to maintain it on a reasonable track for a long time.

Since mid May, dr007 has rebounded significantly back to an open market operation of about 2.2 percent, while AA level interbank certificates have risen significantly from the lowest 2 per cent in May to 3.46 per cent, according to a chief strategy analyst for securities firms. It shows that the liquidity of small and medium-sized banks is in a hurry, and it has actually affected some credit financing, and also led to the continuous upward long-term interest rate.

However, he believes that looking forward, it is difficult for monetary policy to further shrink, and it is more likely to maintain the current tight balance to ensure a relatively healthy financing environment. For example, when the issuance scale of bonds and loans is large, the central bank may release more MLF, otherwise it will release less.

In this case, the existing joint-stock banks have increased the call deposit rate to increase the source of deposits. The reporter learned that the call deposit rate of a joint-stock bank in South China has risen by 50% according to the notice deposit rate of the central bank, of which the 7-day call deposit interest rate has been increased by 2.025%.

Volume and price of interbank certificates of deposit rise

Due to the great pressure on the maturity of certificates of deposit in recent years, issuers have chosen to issue certificates with higher prices. On October 22nd, a money market trader said.

For example, the interest rate of 3-month maturity inter-bank certificates of deposit reached a new high on October 22, when BOC raised its price at 2.95%, the stock bank raised the price to 2.98%, and the city commercial bank could only issue 3.09% - 3.10%. The price of 6-month maturity inter-bank certificates of deposit was also raised to a new high, with joint-stock banks and large banks up to 3.08%. City commercial banks, many institutions in the price increase to 3.19% - 3.20% before buying favor. For the one-year term, the stock banks and major banks raised their prices by 1 BP to 3.16% on October 22, but the amount raised was not as large as that of the short term. Many buyers still held a wait-and-see attitude towards long-term certificates of deposit.

Since the beginning of this year, the interest rate of inter-bank certificates of deposit issued by banks has fallen first and then increased. It has stepped out of the deep V shape and exceeded the MLF interest rate. However, the issuance volume has increased instead of decreasing.

Novel coronavirus pneumonia affected the first half of the year, and the liquidity of the company was significantly lower than the other two. After that, the interbank yield rose sharply from 1.6% to 1.6% on the first day of the second month, and then closed down sharply with the benchmark yield of 1.8% in May. As of October 22, the yield on one-year AAA interbank certificates of deposit was 3.09%.

In the fourth quarter of 2020, the total maturity scale of interbank certificates of deposit is expected to be about 5.3 trillion yuan. Among them, 1.90 trillion, 1.76 trillion and 1.62 trillion interbank certificates of deposit matured in October, November and December respectively. In terms of the maturity of interbank certificates of deposit of different entities, the scale of due inter-bank certificates of deposit of six major banks in the fourth quarter was nearly 1.13 trillion yuan, that of joint-stock banks was about 1.91 trillion yuan, and that of urban rural commercial banks was about 2.24 trillion yuan.

Wang Yifeng, chief financial analyst of Everbright Securities, believes that this year, the phenomenon of controlling the price and quantity of structured deposits and rising both in volume and price of interbank certificates of deposit have occurred at the same time, and the interest rates of deposit market and capital market are rarely merged, which is caused by inter-bank collaboration and regulatory driven resonance. Banks strong demand for medium and long-term stable funds has created a seesaw effect between structured deposits and interbank certificates of deposit, pushing up both volume and price.

For a time, structured deposits have become the weapon of commercial banks. In June this year, the regulatory authorities gave window guidance to some banks, requiring the size of structured deposits to be reduced to the size at the beginning of the year before September 30, 2020, and gradually to two-thirds of the size at the beginning of the year by the end of this year.

According to the data of the central bank, at the end of September, the scale of structural deposits of Chinese banks was 8.98 trillion yuan, a decrease of 445.081 billion yuan compared with that at the end of August, a decrease of 4.72% on a month on month basis, which is also the first time since 2019 to be less than 9 trillion yuan. After a continuous recovery from January to April this year, structural deposits reached a historical peak at the end of April. However, it has declined for five consecutive months after May, mainly because the regulatory authorities require commercial banks to reduce structural deposits, and small and medium-sized banks are the main force of this round of structural deposit pressure drop.

Reducing structural deposits is an important step to reduce financing costs. However, in this process, banks with large pressure drop lose their stable long-term capital, and can only supplement the source of liabilities through interbank certificates of deposit and financial bonds. But at the same time, the interbank certificates of deposit are not included in general deposits. Under the constraints of liquidity indicators, the strength of small and medium-sized banks to compete for deposits is still fierce.

Zhang Huaizhi, an analyst at Dongxing securities, said that the pressure drop in structural deposits has made banks liquidity tighter, and the rapid growth of interbank certificates of deposit has, to a certain extent, made up for the problems of structural deposit pressure drop and slow growth of general deposits.

Liquidity is easy to tighten but hard to loosen this year

Industry insiders said that in the face of centralized maturity of interbank certificates of deposit, combined with the pressure of structural deposit pressure drop, tax payment and issuance of large amount of treasury bonds, it is difficult for banks to fundamentally solve the problem of lack of long-term money. It is expected that liquidity will be in a state of easy tightening but difficult loosening before November.

Will the interbank certificates of deposit (CDS) continue to rise in the future? Wang Yifeng believes that the seesaw effect of structural deposits and ncd will continue, NCD issuance demand is still strong, and ncd interest rates are difficult to fall significantly this year.

Specifically, in terms of volume, the average monthly net financing amount of interbank deposit receipts is expected to maintain at 150-300 billion yuan in September December. In terms of price, the price of interbank certificates of deposit has shown signs of stabilizing, but under the seesaw effect of structured deposits and interbank certificates of deposit, the downward space of interbank deposit receipts prices is limited. The 1-year interbank certificates of deposit will maintain the approximate rate in the range of 2.8% - 3.1%, and MLF interest rate will become the benchmark anchor of interbank certificates of deposit.

The latest view released by the fixed income team of Huatai Securities also believes that the pressure drop of structural deposits of banks will continue. In addition to the peak maturity of interbank certificates of deposit, the issuance pressure is still not small. The lower limit of interbank CDs is 2.95% of the one-year medium term lending facility (MLF) interest rate, and the upward height depends on whether MLF can continue to expand. For the next asset and liability allocation strategy of banks, Zhang Huaizhi said that after October, the liquidity pressure of banks will be relatively relieved. First, the peak of bond issuance has passed, and the pressure on the liability side will be reduced. Second, the over storage rate will have a seasonal rise. Wang Yifeng believes that the cost of comprehensive liabilities of banks in the second half of the year is expected to improve, and the net interest margin has a stable basis. First, the price difference between various deposit products and structured deposits has narrowed, and the growth of core deposits is expected to rebound; second, it is still necessary to absorb medium and long-term stable liabilities such as NCD and financial bonds; third, banks will pay more attention to the growth of high-quality core deposits. Source: editor in charge of economic report in the 21st century: Zhong Qiming_ NF5619

The latest view released by the fixed income team of Huatai Securities also believes that the pressure drop of structural deposits of banks will continue. In addition to the peak maturity of interbank certificates of deposit, the issuance pressure is still not small. The lower limit of interbank CDs is 2.95% of the one-year medium term lending facility (MLF) interest rate, and the upward height depends on whether MLF can continue to expand.

For the next asset and liability allocation strategy of banks, Zhang Huaizhi said that after October, the liquidity pressure of banks will be relatively relieved. First, the peak of bond issuance has passed, and the pressure on the liability side will be reduced. Second, the over storage rate will have a seasonal rise.

Wang Yifeng believes that the cost of comprehensive liabilities of banks in the second half of the year is expected to improve, and the net interest margin has a stable basis. First, the price difference between various deposit products and structured deposits has narrowed, and the growth of core deposits is expected to rebound; second, it is still necessary to absorb medium and long-term stable liabilities such as NCD and financial bonds; third, banks will pay more attention to the growth of high-quality core deposits.