Perspective on Annual Reports | Bank deposit interest rates decline, agency sales income rises—Are deposits "moving"?

In recent years, as deposit interest rates have been on a downward slide, the topic of bank deposits “moving house” has never lost its popularity.

Market forecasts suggest that a large number of bank deposits will mature this year. Against the backdrop of no longer having an interest rate advantage, how banks prevent a “collective exit” of deposits has become one of the hot topics at this year’s earnings release conferences.

The good news is that, based on data from listed banks’ performance reports, there has not yet been a widespread “migration” of deposits. However, each bank remains cautious, with a clear understanding: the decline in bank deposit interest rates offers an opportunity to ease net interest margin pressure, while non-interest income from agency fees, wealth management fees, and other sources has seen significant increases. Those individual deposits that “leave” due to low interest rates tend to circulate back into the banking system through non-bank financial institutions (such as fund companies and wealth management subsidiaries), primarily via interbank deposits.

“Deposits may be lost, but funds will not be lost.” From the perspective of bank executives, the core of winning the “stability deposit battle” this year is “grasping customers.” Wealth management and other value-added services will be the bank’s most powerful “trump card.”

Deposit scale growth has slowed, but there is no large-scale “migration” yet

Since the end of last year, concerns about banks’ “deposit migration” have been ongoing. But according to the 2025 financial reports of listed banks, there has not been a large-scale “migration” of deposits so far, and many banks’ deposit scales still grew last year.

According to incomplete statistics from Beike Finance, 22 A-share listed banks have disclosed their 2025 annual reports, with total deposits maintaining positive year-over-year growth, with an average growth rate of 7.31%.

Specifically, the total deposits of Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank all exceeded 30 trillion yuan. Chongqing Bank, Qingdao Bank, Zhengzhou Bank, Wuxi Rural Commercial Bank, and Huaxia Bank all saw deposit growth rates above 10%. However, China Everbright Bank, Ping An Bank, and Minsheng Bank experienced relatively modest deposit growth, all below 2%.

It is noteworthy that market concerns about “deposit migration” mainly focus on individual fixed-term deposits. However, from the banks’ performance reports, last year’s growth rate of individual deposits was 9.66% year-over-year, and the growth rate of individual fixed-term deposits was as high as 10.97%. This indicates that the trend of deposit termization has not yet changed.

Nevertheless, the growth rates of individual deposits and individual fixed-term deposits in many banks have indeed slowed. According to incomplete statistics from Beike Finance, among the 22 listed banks, 17 saw their individual deposit growth rates in 2024 fall short of 2024, and 12 banks’ fixed-term individual deposit growth was below that of 2024.

An industry insider pointed out that, so far in 2025, there has been no large-scale maturing of bank deposits, mainly because a large volume of fixed-term deposits only matures this year. The slowdown in the growth of individual fixed-term deposits is mainly due to banks actively adjusting and reducing their liability costs.

Deposits can decrease, but funds cannot—banks launch a “fund protection battle”

According to market estimates, a large volume of fixed-term deposits will mature in the banking industry this year. At many banks’ earnings conferences, senior executives stated that since the second half of last year, the scale of maturing deposits has increased compared to previous years, but remains within a normal range.

“Starting from the second half of 2025, the maturing fixed-term deposits at Bank of China have increased,” said Yang Jun, Vice President of Bank of China. He emphasized that the bank is carefully managing the stability and retention of these maturing deposits.

Zhou Wanfeng, Vice President of Bank of Communications, also revealed that this year’s maturing fixed-term deposit quota at their bank has significantly increased compared to last year, with a large proportion concentrated in the first quarter.

For banks, it is not advisable to retain these deposits solely through similarly high-interest fixed-term products. Over the past few years, the scale of fixed-term deposits with relatively high interest rates has been large, and the deposit interest payout rate has been a key factor in pressure on banks’ net interest margins. Therefore, lowering deposit interest rates is an inevitable move. How can banks retain these funds?

“The so-called ‘deposit migration’ refers to the loss of maturing fixed-term deposits.” Peng Jiawen, Vice President of China Merchants Bank, said that from the customer’s perspective, if deposits flow into wealth management and public funds, the bank hopes to keep these funds within the bank through service. Although these may not be on the balance sheet, they are customer funds of China Merchants Bank. In other words, the bank hopes to rely on interbank business and subsidiaries to ultimately achieve the effect that “deposits may be lost, but funds and customers will not.”

Wang Jun, Assistant President of Ping An Bank, also stated that against the backdrop of declining deposit interest rates, changes in the capital market, and improved market investment expectations, he has observed shifts in risk appetite among the bank’s retail customers. Under the overall prudent tone, the proportion of relatively aggressive equity products has increased significantly. Meanwhile, the demand for diversified product portfolios has also become more vigorous.

“From the results, some deposits are not actually lost but are transformed into more efficient asset structures within the bank’s asset allocation system,” Wang Jun said. In response to some changes in deposits in 2026, Ping An Bank will focus on long-term deposit maturity management, not simply renewing at high prices, but integrating wealth management products into the asset allocation services through online and offline channels to meet customer needs. The bank will also continue to enhance high-quality deposit scale through scenario construction.

Fee and commission income turns positive; wealth management is highly anticipated

As some fixed-term deposits mature, funds are entering the investment market.

Since the second half of last year, the wealth management business has improved, driving growth in banks’ fee and commission income.

According to the performance reports of various banks, among the 22 banks that have published their 2025 annual reports, 13 reported year-over-year growth in fee and commission income, compared to only 8 in mid-2024. Meanwhile, the year-end growth rates were higher than those at mid-year.

Many banks pointed out in their reports that the growth in fee and commission income last year mainly stemmed from the expansion of wealth management business.

Construction Bank stated that its asset management business income reached 300k yuan last year, a year-over-year increase of 78.78%, mainly due to growth in wealth management products and fund management fees. Agency business fee income was 15.34B yuan, up 6.19% year-over-year, mainly from increased distribution of funds and bond underwriting. Agricultural Bank of China also noted that its agency business grew by 87.8% last year, mainly due to deepening the transformation of wealth management, with increases in wealth management and distribution fund income.

The scale of wealth management products at bank wealth management subsidiaries also increased. Data shows that Huaxia Wealth Management’s scale grew by 45.82% year-over-year last year, and several other wealth management companies such as China Post Wealth Management, Minsheng Wealth Management, and Everbright Wealth Management saw growth rates exceeding 20%. Additionally, the number of banks with trillion-level wealth management scales has expanded to 13, with China Merchants Bank Wealth Management maintaining the top position with over 2.6 trillion yuan in assets.

The positive trend in wealth management data has led bank executives to place high hopes on this business. Many senior executives at banks stated during earnings conferences that they aim to turn deposit advantages into wealth management advantages.

“Wealth management has great potential for commercial banks,” said Lin Li, Vice President of Agricultural Bank of China, at the conference. He pointed out that large-scale wealth management has become a new growth engine for the industry.

Chief Financial Officer of China Construction Bank, Sheng Liurong, also said that as residents’ awareness of investment and financial management continues to strengthen, there is still significant room for growth in wealth management, asset management, and custodian services connecting both ends.

Beijing News Beike Finance Reporter: Jiang Fan | Editor: Chen Li | Proofreader: Mu Xiangtang