On the morning of December 20, the Bank Of China Limited(601988) inter-bank lending center announced that the quoted loan market interest rate (LPR) 1y was reduced by 5bp to 3.80%, and remained unchanged above 5Y and maintained at 4.65%.
The interest rate cut is in line with market expectations, and further easing can still be expected, which is of greater significance to the steady growth of bank stocks. After the central economic work conference, monetary credit was further relaxed, and the interest rate cut was intended to maintain steady growth and cooperate with the credit easing at the beginning of the year. In December, the RRR cut reduced the capital cost of financial institutions, and the interest rate cut contributed to the transmission. At the same time, we believe that there is still the possibility of further easing in the future. After more than 5 years, the mortgage remains unchanged, the real estate policy still tends to pick up, and the liquidity of real estate enterprises is improved by encouraging mergers and acquisitions. The impact of RRR reduction on bank profits is positive and the impact of interest rate reduction is negative. Considering the possible easing mode in the future, the interest margin may decrease slightly, and the range is very small.
For bank stocks, stabilizing the economy is more meaningful than the current slight fluctuation of interest rate spread. Since the beginning of this year, the expected fluctuation has become more high-frequency, and the poor expectation should not be captured. It is suggested to pay attention to the policy and economic trend. Under the acceleration of the policy of wide credit and stable growth at the beginning of the year, especially the real estate policy continues to improve, and the market of the banking sector can be expected. With the sustained development of the steady growth policy, the economic data bottomed out and may improve marginally, which is also the driving force of the follow-up stock price.
In terms of individual stocks, Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) , Postal Savings Bank Of China Co.Ltd(601658) , Bank Of Hangzhou Co.Ltd(600926) , Changshu and Bank Of Jiangsu Co.Ltd(600919) gradually began to pay attention to the value of undervalued targets.
The LPR reduction is intended to cooperate with the credit expansion at the beginning of the year and reduce the comprehensive financing cost of enterprises
The central economic conference made it clear that steady growth will continue, monetary and credit easing will continue, and the RRR and interest rate cuts this month are in line with expectations. Specific measures will be taken under the established policy objectives. The interest rate cut at the current time point, or the effect of reducing financing costs by 5bp in view of the wide credit and loan repricing at the beginning of next year, has a slight negative impact on the yield of bank loans.
The mortgage remains unchanged, M & A is encouraged, and the real estate policy continues to ease
The LPR has not been reduced for more than 5 years, the mortgage interest rate remains unchanged, and the pressure on real estate will not be relieved in this way. According to media reports, the central bank and the China Banking and Insurance Regulatory Commission issued the notice on doing a good job in M & a financial services for risk disposal projects of key real estate enterprises to alleviate the liquidity pressure of real estate enterprises by encouraging M & A.
LPR will be lowered but MLF will not be lowered. We will pay attention to the change of debt cost and possible further easing
LPR forms a quotation by adding points to MLF, and the national interbank lending center calculates the loan market quotation interest rate by removing the arithmetic mean of the highest and lowest quotation. MLF did not cut the interest rate, which means that the quotation spread decreased, which means that the quotation plus points of each line decreased. In December, the announcement on reducing the reserve requirement stated that “reducing the capital cost of financial institutions by about 15 billion yuan per year can promote the reduction of social comprehensive financing cost through the transmission of financial institutions”. This time, it is promoting the transmission. In addition, it remains to be seen whether the early policies have improved the debt cost. Recently, the cost of interbank certificates of deposit has risen, and it is expected that there is still the possibility of easing the policy in the future, so as to help broaden the credit at the beginning of the year.
Risk warning: large-scale outbreak of real estate default risk; The economy fell sharply, exceeding expectations.
