On March 5, 2022, the government work report was released, which made it clear that the GDP growth was about 5.5%, the unemployment rate was controlled within 5.5%, the implementation of monetary policy was clearly strengthened, and financial institutions continued the policy direction of benefiting small and medium-sized enterprises, reducing fees and interests. The report once again defined the direction and measures of steady growth since last year. At the same time, the newly mentioned “financial stability guarantee fund” may be more prudent in financial risk prevention measures in the future in combination with the previous report of the central bank.
The economic growth target is 5.5%, and the determination to stabilize growth is clearer
First, make clear the target of economic aggregate: GDP growth of about 5.5%, more than 11 million new jobs in cities and towns, and the unemployment rate within 5.5%. The number is clear. Steady growth must be strengthened to achieve the target. Second, we should re emphasize the primary position of steady growth. The first task of 2022 is to “strive to stabilize the macro-economic market”. Third, the fiscal deficit was 2.8%, lower than previously expected. The report made it clear that in addition to fiscal revenue, the balance profits handed over in recent years and the stable adjustment of the budget. “This year’s expenditure has expanded by more than 2 trillion compared with last year, and the available financial resources have increased significantly.” fiscal power and infrastructure support are positive, so there is no need to worry.
Clearly increase the intensity of monetary policy easing and credit easing.
Clarify the strength of monetary policy, “increase” the implementation of prudent monetary policy, clarify the dual functions of aggregate and structural tools, clarify the “expansion of new loan scale” of credit, match money with social finance, the macro leverage is basically stable, the strength of credit supply may still be sustained, and the structure and aggregate may be loose or there is still room.
Financial support entities: inclusive microenterprises remain the focus, and the financing and credit environment continues to be optimized. First, benefiting small and micro enterprises and supporting agriculture are still the focus, and guiding funds to key areas and weak links. Second, it is still required to reduce the real loan interest rate. Over the past two years, the financing cost has continued to decline, the bank’s credit income has become more and more difficult to obtain, and the space for continued pressure reduction may be limited. The cost reduction measures in deposit, credit and other aspects may continue to promote the decline of financing cost. At the same time, the interest rate spread may gradually reach the bottom. Third, strengthening credit data and information connectivity, improving the coverage of government guaranteed financing for small and micro enterprises, and optimizing the financing credit environment. Since last year, the financing credit environment has been continuously optimized, which is conducive to improving the efficiency of bank risk control and reducing the cost of credit.
Prevent financial risks and pay attention to the financial stability guarantee fund.
This report newly mentioned the establishment of a “financial stability guarantee fund”. Referring to overseas experience, the financial stability fund is intended to deal with and rescue major financial risks in a timely manner and buffer the impact and spread of financial risks. Combined with the previously released “financial risks are converging and the stability foundation is more solid” on the central bank’s website, with the uncertainty caused by the conflict between Russia and Ukraine and relevant economic and financial sanctions, financial risk prevention and risk disposal will be more cautious and pay more attention to stability expectations in the future.
The government work report further clarified the importance and effectiveness of steady growth, reiterated its views and continued to be optimistic about the bank market. We expect that the structure and total amount of credit data in February or similar to that in January, the demand is weak and the policy is strong, which continues our previous logic. At present, there is no need to worry too much about the weak demand. The economy has a cycle, the policy has goals, and there is greater possibility and space for improvement in a lower position. The goal of steady growth is clear, there is room for policy strength, and it takes time to achieve results. Policies are effective, and data improvement is catalytic or continuous. Compared with other stable growth varieties, the bank has lower valuation, limited increase in the early stage and greater upward space in the future. In terms of individual stocks, it is recommended to pay attention to urban and rural commercial banks with rapid performance growth, such as Bank Of Jiangsu Co.Ltd(600919) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Hangzhou Co.Ltd(600926) , 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) .
Risk tip: the deterioration of asset quality caused by economic downturn exceeded expectations.
