Event comments
On December 16, 2021, Yi Gang, President of the people's Bank of China and director of the office of the financial stability and Development Commission of the State Council, presided over a symposium on the analysis of the monetary and credit situation of financial institutions, earnestly studied the spirit of the central economic work conference, studied the current monetary and credit situation and deployed the next work.
Monetary policy is stable and loose + RRR reduction releases long-term funds + capital replenishment is accelerated, and the credit scale of commercial banks can be expanded. The meeting stressed that "stability is the key, progress is sought while stability is stable, and sound monetary policy is well implemented". The monetary policy continues to be loose while stability is stable. The growth rate of total assets expansion of commercial banks is upward. In October, the year-on-year growth rate of total assets of commercial banks increased by 0.50PCT month on month, and that of large banks and joint-stock banks increased by 0.73pct and 0.70pct respectively. Among them, the proportion of loans in total assets continued to increase, and the proportion of loans from national large banks in total assets increased by 0.71 PCT month on month. In addition, the central bank lowered the reserve requirement on December 15, releasing a total of about 1.2 trillion yuan of long-term funds. At the same time, the supplement of external channel capital of commercial banks has accelerated since the third quarter. Under the resonance of internal and external factors, the growth rate of credit scale expansion of commercial banks can be expected in 2022.
The "correction" effect of real estate credit gradually appeared, driving the recovery of credit demand. Since September 2021, the regulator has repeatedly made public statements on real estate policies, releasing the correction signal of the implementation of real estate financing regulation. At present, the "correction" effect of credit in the real estate field is gradually emerging. In October, the year-on-year growth rate of real estate loans was 8.2%, up 0.60 PCT month on month, the first month on month rise since 2021. In November, the central bank separately disclosed the data of individual housing loans. Individual housing loans increased by 401.3 billion yuan in November, 53.2 billion yuan more than in October, reflecting that the pace of mortgage loans has returned to normalization. Under the rectification of real estate policy implementation, the bank's real estate risk pressure was relieved, driving the recovery of credit demand.
The structural monetary policy has made precise efforts, and manufacturing, inclusive small and micro enterprises and green credit remain important fulcrums for stabilizing credit. The symposium proposed to "enhance the stability of total credit growth and steadily optimize the credit structure", reflecting the existence of "large-scale credit structure" under the background of "stable total credit". Since the third quarter, the central bank has made precise efforts to support the flow of credit funds to manufacturing, inclusive microenterprises and green finance through structural monetary policies such as the addition of 3000 yuan of small refinancing line, the establishment of carbon emission reduction support tools and the establishment of 200 billion yuan of special refinancing to support the clean and efficient utilization of coal. In September 2021, medium and long-term loans to manufacturing The year-on-year growth rates of Pratt Whitney small and micro loans and green loans were 37.80%, 27.40% and 27.97% respectively, higher than the growth rates of total loans of 25.90pct, 25.50pct and 16.07pct. At the regulatory level, policy support continues to increase, superimposed on the fine drip of structural monetary policy. It is expected that manufacturing, inclusive microenterprises and green credit will remain important fulcrums for stabilizing credit in 2022.
The cost drop on the liability side supported the steady recovery of net interest margin. In terms of return on assets, the interest rate of newly issued Pratt & Whitney small and micro loans in October was 4.94%, up 5bp month on month, and the average weighted interest rate of newly issued loans was 4.59%, up 1bp compared with June. Although the interest rate of newly issued loans has increased recently, the symposium proposed to "maintain the steady decline trend of enterprise comprehensive financing cost", and it is expected that the pressure trend of asset end yield will continue. At the cost level of the liability side, since this year, the regulators have continued to reduce the scale of high interest rate deposits. At the same time, after the central bank cut the reserve requirement in December, it will reduce the capital cost of financial institutions by about 15 billion yuan per year. The effective pressure drop of the liability side cost is the core factor supporting the stabilization of the net interest margin. It is expected that with the implementation of RRR reduction, the decline of debt end cost in 2022 will support the stabilization and recovery of net interest margin.
Investment advice
Monetary policy is stable and loose + RRR reduction releases long-term funds + bank capital replenishment is accelerated. The credit scale of commercial banks can be expanded in 2022. While the total amount is stable, there is "structural progress". Manufacturing, inclusive small and micro enterprises and green finance are still the key areas of credit. At the level of net interest margin, the debt side cost drop is the core factor supporting the stabilization and recovery of net interest margin. It is expected that the implementation of standard reduction will be favorable, the interest margin will stabilize and recover, and bank credit is expected to usher in a simultaneous rise in volume and price. Therefore, we suggest paying attention to the large and joint-stock banks with good development momentum of inclusive small and micro enterprises and green finance business and the advantage of deposit cost.
The implementation of risk warning policy is not as expected; The epidemic repeatedly exceeded expectations.
