Since October, foreign banks operating in China including HSBC, Standard
Chartered, DBS and Yongfeng Bank have been rolling out RMB large-denomination
time deposits. Yongfeng is offering a 3-year annualized yield of 1.92%, roughly
40bps above state-owned big banks' 3-year products; Bank of East Asia has issued
multiple 3-year offers at 1.90% this year. Standard Chartered and HSBC are
concentrating on short-dated tenors of one year or less. Rong360 analyst Ai
Yawen says the push is primarily to stock RMB for cross-border business and
shore up retail funding gaps, but higher rates to attract deposits will squeeze
margins and are unlikely to be sustained long term.
