Corporate structured deposits are growing at a significant rate amidst the continuing trend of depressing personal structured deposits
China Technology Investment, Xiaona Li, Min Long
Recently, the data released by the People's Bank of China showed that the balance of structured deposits of various banks at the end of January was 5.98 trillion yuan, an increase of 17.72% from the previous year. Among them, the size of corporate structured deposits was 3.98 trillion yuan, up 21.71% from the previous year, and the growth rate of corporate structured deposits of large banks exceeded that of small and medium-sized banks.
At the same time, structured deposits are also favored by a number of listed companies, and one after another, companies have issued announcements that they have chosen to purchase structured deposit products with idle funds. Data show that since this year, as of February 16, 552 listed companies have purchased a total of 162 billion yuan of financial products, of which 423 have purchased structured deposit products, with a total subscription of 109.9 billion yuan, accounting for 67.8%.
Corporate structured deposits grow in size
Recently, the size of structured deposits, which had been suppressed for several months, rebounded. According to the latest data released by the central bank, the balance of structured deposits rebounded to 5.98 trillion yuan at the end of January, an increase of 17.72% from a year earlier. Among them, corporate structured deposits amounted to about 3.98 trillion yuan, accounting for 66.56% of all structured deposits, an increase of 21.71% from a year earlier.
Central bank data show that in terms of corporate structured deposits, large Chinese banks were 1.40 trillion yuan, four large national banks were 1.03 trillion yuan and small and medium-sized banks were 2.58 trillion yuan in January, while in December last year, large Chinese banks had 1.02 trillion yuan in unit structured deposits, four large national banks were 0.74 trillion yuan and small and medium-sized banks were 2.25 trillion yuan.
From the above data, we can calculate that the growth rate of structured deposits of large Chinese banks, four large national banks, and small and medium-sized bank units in January this year compared with December of the previous year were 37.25%, 39.19%, and 14.67%, respectively, and the growth rate of structured deposits of large banks significantly exceeded that of small and medium-sized banks.
However, in terms of individual structured deposits, the decline was more pronounced for large banks than for small and medium-sized banks. Specifically, in January this year, individual structured deposits of large banks, four large banks, and small and medium-sized banks were RMB 0.71 trillion, RMB 0.41 trillion, and RMB 1.29 trillion, respectively, with a change of -41.32%, 10.81%, and 115%, respectively, from a year earlier.
In this regard, Zhou Maohua, a macro researcher in the financial market department of Everbright Bank, analyzed that "from previous years, structured deposits tend to grow in January, and the increase in the scale of corporate structured deposits is generally larger than that of individuals, which is related to the concentration of credit placement by banks at the beginning of the year. The larger amount of funds in the hands of enterprises at the beginning of the year helps reduce the cost of credit funding for enterprises, but if the term of structured deposit products is too long, resulting in the credit funds given by banks to enterprises still lying on the books, not really transformed into investment and consumption, which is not conducive to economic expansion."
Yang Changhan, a professor and doctoral supervisor in the Department of Finance and Financial Management at the Business School of Central University of Finance and Economics, told China Technology Investment that the large scale of corporate structured deposits in January may be due to seasonality. As the Spring Festival approaches, a large number of enterprises consider the Spring Festival holiday factor, and their production and operation activities are relatively slowed down, and their idle funds are invested in structured deposits, which can not only guarantee the capital arrangement but also obtain a certain higher return. Large banks are better able to attract deposits from enterprises and units due to their strong design and management of public business. Small and medium-sized banks focus on retail banking business and are more aggressive in expanding personal structured deposits in structured deposits.
"Structured deposits are deposits, but are distinguished from general deposits and bank wealth management. The returns of structured deposits are linked to interest rates, exchange rates, prices, and commodity index derivative financial products, and the returns are subject to certain volatility. Structured deposits are an important part of commercial banks' liability business. Commercial banks operate structured deposits by considering various factors such as compliance, liability scale and structure, liability cost and risk, customer demand, and the bank's own operating characteristics." Yang Changhan added.
The best choice with controlled risk
Meanwhile, a number of listed companies have recently issued announcements to purchase bank structured deposit products. First Health Technology (1302.HK) announced on March 4 that it had subscribed 50 million yuan of capital guaranteed floating income structured deposits; Yongyue Technology (603879.SH) announced on March 5 that it had used 85 million yuan of idle proceeds to purchase structured deposit products; and Kangxinuo Bio-B (6185.HK) also previously disclosed that it had purchased 400 million yuan of structured deposits from banks.
From the current announcements issued by listed companies, Jiangsu Guotai (002091.SZ) is the company holding the most wealth management products, since this year has purchased 29 new wealth management products, and 29 wealth management products are structured deposits, the total subscription amount of 4.002 billion yuan, the shortest commission date is 11 days, the longest is 178 days.
In addition, among the companies that purchased bank asset management products in 2022, the one that subscribed the most funds for structured deposits was Airfa Power (600893.SH), with a subscription amount of 7.5 billion yuan, and the products subscribed were mainly ICBC (601398.SH) linked exchange rate interval accumulation-type legal person RMB structured deposit products, and Construction Bank (601939.SH) unit RMB The products subscribed were mainly ICBC (601398.SH) RMB structured deposits for legal entities with linked exchange rate range accumulation and Construction Bank (601939.SH) RMB per unit structured deposits with interest rates between 1.3% and 3.74%.
The above listed companies have indicated that the reason for purchasing financial products is to make full use of the company's idle funds, improve the efficiency of capital use and maximize shareholders' income. Relevant data show that since 2022, as of February 16, 552 listed companies have purchased wealth management products totaling 162 billion yuan, of which 423 have purchased structured deposit products, with a total subscription of 109.9 billion yuan, accounting for 67.8%.
On the listed companies are keen on structured deposit products, Jiang Han, a senior researcher at Pangu Intelligence, told China Technology Investment, "The core reason why many companies favor structured deposits is that its yield is controllable, plus structured deposit products have adjustable space, and in the case of less optimistic stock market or other capital market investment products, structured deposits are good."
Although a number of listed companies have recently purchased structured deposit products, the yields of various types of bank structured deposits have gradually gone down since the regulator issued a document requiring banks to strictly control the scale of structured deposits.
According to incomplete statistics from Rong360 Digital Technology Research Institute, the average term of RMB structured deposits issued by banks in January 2022 was 138 days, 2 days shorter than the previous month; the average expected minimum yield was 1.28%, up 2BP; the average expected middle yield was 3.13%, down 4BP; the average expected maximum yield was 3.61%, down 6BP. Most of the structured deposits with three-tier yield structure were issued by joint-stock banks and city merchant banks, with more linked to gold and exchange rate.
From the perspective of different types of banks, the average term of structured deposits of state-owned banks in January 2022 was 90 days, with an average expected maximum yield of 3.43%, up 5BP; the average term of joint-stock banks was 187 days, with an average expected maximum yield of 3.78%, down 17BP; the average term of city commercial banks was 156 days, with an average expected maximum yield of 3.7%, down 1BP from the previous year. down 1BP.
The "January Structured Deposit Report" released by Rong360 Digital Technology Research Institute shows that the cost of structured deposits is high compared to general bank time deposits, and there is a possibility of decreasing yields in the future. Among them, the yields of structured deposits of state-owned banks have been adjusted downward significantly in 2021, and there is limited room for further downward adjustment in 2022; the structured deposits of joint-stock banks have higher average expected yield and actual yield to maturity than those of state-owned banks, and the room for yield decline is greater than that of state-owned banks.
"For enterprises, the allocation of financial products often put the risk factor in the first place, enterprises must first consider their risk tolerance and the level of market development, if there is not enough risk tolerance, often choose structured deposit products, if the enterprise has some risk tolerance and is better at investment, it may carry out stock market operations. " For the direction of the choice of financial products for listed companies, Jiang Han added.