See which banks will edge out.
According to Nomura, it attended meetings with managements of three H-share banks – BOC, CMB, and CRCB – at its HK/China Financial Corporate Day (5 December 2013).
Nomura noted that although the managements expect that it would likely take a few years for deposit rates to be fully liberalized, they all agreed that the deposit insurance scheme will be launched soon (could be as early as the end of this year or early next year).
While listed banks generally have advantages of solid financial positions and better branding effect in attracting deposits, their main concern is the fee rate on the insurance scheme.
According to the managements, there is no official figure of the fee rate yet, but the range should likely be 1bp to 5bps, which would equal 0.2% to 1.3% of banks’ PBT per our estimation. There is also a possibility that fee rates might be differentiated among banks with large banks paying less.
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