This round of deposit rate cuts is spreading rapidly, with Mitsubishi UFJ Financial Group taking the lead among foreign banks to follow suit.

Mitsubishi UFJ Bank announced that it will adjust the interest rates on Renminbi deposits starting from June 3. In the announcement, Mitsubishi UFJ Bank Limited stated that starting from June 3, 2025, it will adjust the following Renminbi deposit interest rates: the current deposit interest rate will be adjusted from 0.10% to 0.05%; the 1-year fixed deposit interest rate will be adjusted from 1.10% to 0.95%; the 2-year fixed deposit interest rate will be adjusted from 1.20% to 1.05%; and the 3-year fixed deposit interest rate will be adjusted from 1.50% to 1.25%. Compared to the state-owned and joint-stock banks that lowered interest rates last week, the rate cut for this foreign bank's time deposit is basically consistent with its counterparts, but the rate cut is significantly smaller than last year. Analysis points out that the speed at which joint-stock and foreign banks are following suit in cutting interest rates indicates that the pressure on net interest margins in the banking industry is huge, and they are not willing to wait even for a day or two. In the long run, banks need to actively explore more revenue sources outside of net interest margins. In addition, from the historical experience of foreign countries, excessively low interest margins are not conducive to the sustainable development of banks, and the future interest rate reduction space in the banking industry may be "very limited."