The fourth quarter goods policy report said that China’s economic development is facing the triple pressure of shrinking demand, supply shock, weakening expectation and severe external environment. In the next stage, monetary policy pays more attention to the steady development of China’s economy and preventing possible risks of major overseas economies, and monetary policy is more active and forward. The recent policy shows that the management has confidence and determination in the steady growth and real estate policies, and the policies will continue to work until the economic and real estate data and expectations improve.
Reiterate the view that steady growth continues to catalyze and firmly optimistic about the bank market. Fully optimistic about the industry, individual stocks recommend high-quality regional banks: such as Bank Of Hangzhou Co.Ltd(600926) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) , etc.; continuous recommendation of core targets: Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) , Postal Savings Bank Of China Co.Ltd(601658) , focusing on the value of undervalued targets.
It is clear that the uncertain factors of China’s economic development still exist, and the external environment is becoming more complex, severe and uncertain
The central bank believed that China’s macro-economy recovered and stabilized in the fourth quarter, but mentioned the uncertainty brought by factors such as “epidemic situation, inflation and monetary policy adjustment of developed economies” to economic development, and stressed that “China’s economic development is facing triple pressure of demand contraction, supply shock and weakening expectation, and the external environment is becoming more complex, severe and uncertain”. Compared with the third quarter: the fourth quarter report is more cautious in judging the economic situation and pays more attention to the “risk spread” that may be brought by overseas economies; The judgment on the risk of China’s real estate market was deleted in the fourth quarter report, which also reflects the current risk mitigation of the real estate market.
Monetary policy is expected to continue to exert force, stabilize growth and real estate, and increase credit supply
In the next stage, the idea of monetary policy continues to actively expand credit. The central bank emphasizes “strengthening cross cycle regulation”, “paying attention to sufficient, accurate and forward force” and “guiding financial institutions to effectively expand loan lending”. At the same time, slightly weaken the expression of “focus on me”, emphasize “deal with the balance between internal balance and external balance”, and take into account China’s economic pressure and the expectation of interest rate increase of major economies.
In terms of credit investment, the central bank continued to guide financial institutions to support small and micro enterprises, double carbon and other fields. At the end of December, the balance of inclusive small and micro loans and the number of small and micro business entities increased by 27.3% and 38% year-on-year. The report opened a special column on small and micro loan tools. From 2022 to the end of June 2023, local corporate banks will be provided with support funds according to 1% of the quarterly balance increment of inclusive small and micro loans; From 2022, the “inclusive credit loan support plan for small and micro enterprises” will be incorporated into the management of “re loan for supporting agriculture and small enterprises”.
In 2021, the interest rate of corporate loans reached a record low, and the decline in the interest rate of new loans in December was more affected by structural factors
The report further mentions that it will promote the reduction of comprehensive financing costs of enterprises. In 2021, the reform and opening-up of enterprise loan interest rate is the lowest, and the bill interest rate is close to the historical low in 2008. It is expected that the month on month decline of new loans in 2022 will be significantly narrowed. The interest rate of new loans issued by banks in December was 4.76%, up 24bp from September, which was more affected by weak credit demand and structural factors. In December, bill financing increased sharply, and the mortgage amount with high yield was limited. The general loan interest rate / weighted average interest rate of corporate loans decreased by 11 / 2bp respectively compared with September, and the mortgage interest rate increased by 9bp. Since January, the regulation has guided financial institutions to increase financing support for the real economy. The increment of corporate loans has reached a new high, the credit structure has been optimized, the mortgage investment has been accelerated, and the deposit side has been continuously controlled. We believe that the optimization of the structure will help to alleviate the marginal narrowing of bank interest rate spread.
Risk warning: large-scale outbreak of real estate default risk; The economy fell sharply, exceeding expectations.
