China banks threatened by seasonally weak deposit gathering period

It will last until October.

According to Bernstein, in China, the commercial banks scramble to attract deposits from households at quarter-end in order to meet the regulatory maximum 75% loan-to-deposit ratio requirement (or to report the lowest loan-to-deposit ratio it can). 

Here's more from China:

The Chinese banks then proceed to offload these short-term deposits once the quarter-end balance sheet is printed. This behavior normally results in a net outflow in the first month of the quarter, as was the case in July.

There is also annual seasonality with regards to deposit gathering. We are in the middle of the 7-month period from April to October that is very challenging for the banks' HH deposit gathering activities.

The November-March period is typically a much easier time for banks to attract deposits from households. Over the past eight years, 87% of full-year household deposits were gathered in these 5 months alone.

During the rest of the year the banks are only able to attract 13% of their full-year HH deposit flows! As a result of this seasonality trend, we expect deposit growth to remain weak in the coming months.