The "Big Four" banks are gathering together! The Industrial and Commercial Bank of China has today resumed the issuance of five-year large-denomination certificates of deposit, and what does the consistent pricing of up to 1.6% mean?

This morning, a reporter from Caixin discovered on the Industrial and Commercial Bank of China (ICBC) APP that the bank has officially resumed the issuance of 5-year large denomination certificates of deposit (CDs) starting today, with annual interest rates of 1.60% and 1.55% for the two products. This also means that, following the July releases of 5-year large denomination CDs by three major state-owned banksBank of China, Agricultural Bank of China, and China Construction BankICBC has chosen to follow suit. Currently, the highest pricing for this round of 5-year large denomination CDs among the four major banks is 1.6%. Industry insiders believe that the actions of the four large state-owned banks have a certain guiding effect on the banking sector, suggesting that "more medium and small banks may follow suit in the future." The "Universal Bank" has also joined in, as all four major state-owned banks have resumed the issuance of 5-year large denomination CDs. This morning, a reporter from Caixin logged into the Industrial and Commercial Bank of China APP and found that ICBC has quietly launched two 5-year large denomination CD products today. Both products have a minimum deposit requirement of 200,000 yuan, with slightly different annual interest ratesone is 1.60% and the other is 1.55%, both are "transferable." Currently, both products have ample quotas, showing over 10 million on the APP. It is worth noting that these two products also indicate support for partial early withdrawals. In the past year or two, the Industrial and Commercial Bank of China, along with other major state-owned banks, had already suspended the issuance of 5-year large denomination CDs. Moreover, according to records from Caixin reporters querying the ICBC APP yesterday and the day before, no large denomination CD products with terms exceeding 3 years were displayed. Previously, Caixin exclusively reported that on July 1, Bank of China was the first to restart the issuance of 5-year large denomination CDs, with the interest rate reaching up to 1.60%. This marked the first bank to "restart" such deposit products after a collective suspension of 5-year large denomination CDs by major banks over the past two years. On the same day, Agricultural Bank of China also launched several large denomination CD products on its official website, though all had terms shorter than 2 years. On July 8, Agricultural Bank of China introduced a personal large denomination CD product with a 5-year term and an annual interest rate of 1.6%, with a minimum deposit of 200,000 yuan, but could only be handled at bank counters. Shortly after, China Construction Bank Corporation also launched two 5-year personal large denomination CD products in mid-July, with annual interest rates of 1.55% and 1.60%, respectively. On August 1, the Industrial and Commercial Bank of China opted to relaunch its 5-year large denomination CD products, indicating that all four traditional state-owned banks have resumed these high-interest savings products in the second half of this year. Joint-stock banks and city commercial banks have not yet followed suit on a large scale, and industry commentators describe the situation as having "complex reasons" behind the large banks' restart of the 5-year products. Today, a Caixin reporter checked the official websites of major joint-stock banks and city commercial banks and found that some joint-stock banks recently followed Bank of China in resuming the issuance of 5-year large denomination CDs. For instance, the official announcement from Huaxia Bank states that it launched six 5-year large denomination CD products on July 15, with minimum deposits ranging from 200,000 to 1 million yuan. Ping An Bank issued a 5-year large denomination CD product with an annual interest rate of 1.75% on July 14, with a minimum purchase amount of 200,000 yuan. However, as of the time of this report, China Merchants Bank's official website and APP did not display any issuance of 5-year large denomination CDs. Furthermore, many mainstream city commercial banks like Bank of Beijing and Bank of Hangzhou also did not show any 5-year large denomination CDs available for sale through their official channels. An insider from a joint-stock bank told Caixin that their bank has recently been paying attention to the news of the sequential resumption of 5-year large denomination CDs by Bank of China, China Construction Bank, and Agricultural Bank of China, and that relevant departments are currently discussing the matter, with "similar actions not ruled out in the future." Another city commercial bank insider mentioned that there have been no updates from relevant departments about launching 5-year large denomination CD products recently, as the focus in the banking sector is still on reducing high-interest liabilities. However, upon hearing that ICBC has resumed issuance, the insider noted that ICBC's actions have a certain guiding influence within the industry, expressing some surprise, and anticipating that more medium and small banks may follow. So, how should we understand the current round of state-owned banks sequentially resuming the issuance of 5-year large denomination CDs? What does the unified pricing of up to 1.60% signify? A banking analyst told reporters that there are reasonable grounds for the four major banks choosing to restart the issuance of high-interest large denomination CDs in the second half of the year. Based on the first quarter reports from some major state-owned banks and joint-stock banks, the trend of "deposit regularization" has not fundamentally changed, and many banks are still seeing increases in the proportion and amount of time deposits. In the context of interest spread control, major banks should further reduce high-interest liabilities. However, considering that state-owned banks play a crucial role in financing, they face pressure in loan disbursements. With the half-year assessment period having passed, banks have the motivation to reasonably adjust their liability structures and attract relatively low-interest long-term deposits from residents. An insider from a major state-owned bank also pointed out to reporters that different banks have different characteristics in their asset-liability structures. Although banks had previously tended to reduce long-term deposit products, aiming to make "deposits more liquid," the current effectiveness has not met expectations. Given that some residents still have a demand for principal-protected deposit products, it is reasonable for banks to choose to phase in the resumption of 5-year products. Amidst the current scenario where medium and small banks have a significant interest rate advantage over large banks, major banks are also compelled to respond flexibly, "especially after observing that the first major bank resumed issuance; it will inevitably spur imitation." Recently, some analytical institutions have indicated that since the second quarter, there has been a noticeable change in the liability structure of major state-owned banks. For instance, Tianfeng Securities' Tn Ymng and others published a research report stating that since the second quarter, the banking system's liabilities have shown certain structural differentiation, with major banks seemingly experiencing a "liability shortage," while this trend is not evident among medium and small banks. The issuance of large denomination CDs by major banks continues to increase, but net financing remains negative for joint-stock banks, city commercial banks, and agricultural commercial banks. The willingness of large banks to lend out funds has significantly declined, whereas, comparatively, there has been marginal improvement for medium-sized banks in the second quarter. "In a sense, it can also be interpreted that some banks believe that large-scale interest rate cuts in the future are unlikely. The market bottom for interest rates may have gradually emerged," another banking insider informed reporters. This article is sourced from Caixin, authored by Png Kfng; edited by Wn Wn.