Banking: NET spreads may rebound in 09 between 2 and 3

Events in the 09-year 1 quarter, the state-owned enterprises, joint-stock banks and City firms, the average level of net spreads are 2.27%, 2.4% and 2.7% respectively, the overall lower than the beginning of 50 BP. Reviews 1. Net interest rate drop reason 09 in the first quarter, the average level of net interest difference between state-owned and joint-stock banks and City firms was about 2.27%, 2.4% and 2.7% respectively, which decreased by 58, 62 and 42BP respectively at the beginning of the year.　　There are three main reasons: first, the structure of assets and liabilities asymmetry, long loan short deposit structure causes the loan interest rate cut has 1~2 quarter time lag.　　Second, in the 1 quarter of 09, liquidity was plentiful, market interest rates were down sharply, and bank lending rates were lowered to secure better loans for infrastructure investment. Third, the 09 1-quarter new loans in the paper financing accounted for relatively high. In the first two months of this year, new loans reached 1.62 trillion yuan and 1.07 trillion yuan respectively. Among them, the proportion of bills accounted for 38.5% and 45.5%. Although the volume of March bills has declined compared with December, the total is still not low.　　Because the interest rate of bill financing is much lower than the loan interest rate, it is negative to the net interest margin. 2. NET spreads will pick up in the 2~3 quarter although net spreads have fallen considerably in the first quarter, we think net spreads will rebound in the 2~3 quarter.　　The reason: First, further interest rate cuts are expected to weaken, the price of listed bank debt remains stable, and asset pricing will be completed in the 1~2 quarter. Second, the market interest rate after a large downward trend is now relatively stable.