Event overview:
The central bank released financial and social finance data for February: RMB loans increased by 1.23 trillion yuan in February, a year-on-year decrease of 125.8 billion yuan; RMB deposits increased by 2.54 trillion yuan, an increase of 1.39 trillion yuan year-on-year; The growth rate of M2 was 9.2%, with a year-on-year decrease of 0.9pct and a month on month decrease of 0.6pct; The growth rate of M1 was 4.7%, a year-on-year decrease of 2.7pct and a month on month increase of 6.6pct; In February, social finance increased by 1.19 trillion yuan, a year-on-year decrease of 531.5 billion yuan; At the end of the month, the stock of social finance was 321.12 trillion yuan, a year-on-year increase of 10.2%.
Analysis and judgment:
In February, the credit structure further weakened, lower than expected, and the endogenous driving force of the economy needs to be boosted
In February, RMB loans increased by 1.23 trillion yuan, a year-on-year decrease of 125.8 billion yuan. The scale basically met expectations. There were factors that fully released the credit demand under the large amount of credit in January. At the same time, the Spring Festival and epidemic factors also had a certain impact. Overall, in the first two months, a total of 5.21 trillion yuan of new RMB loans were added, maintaining a small increase year-on-year. Since this year, the intensity of credit supply is still high. The growth rate of loan balance was 11.4%, with a continuous decrease of 1.5pct and 0.1pct on a month on month basis.
In terms of structure, the pattern dominated by enterprise short-term loans continued in February, and several sub sectors hit a new low: 1) residential loans: the volume of residential loans decreased by 336.9 billion yuan in February, an increase of 479 billion yuan year-on-year, which fell to a negative value for the first time since February 2020. Among them, short-term loans decreased by about 290 billion yuan, an increase of 22 billion yuan year-on-year, which is weaker than seasonality, and residential consumption is still weak; The negative growth of medium and long-term loans was 45.9 billion yuan, which fell to negative value for the first time in history, which is related to the weak real estate sales data. 2) Corporate loans: increased by 1.24 trillion yuan, an increase of 40 billion yuan year-on-year, of which medium and long-term loans increased by 505.2 billion yuan, and a decrease of about 600 billion yuan year-on-year under the high base. It is mainly supplemented by corporate short-term loans and bills, with an increase of 160 billion yuan and 490 billion yuan year-on-year respectively. Combined with the sharp decline of rediscount interest rate in February, it reflects a certain impulse demand. From January to February, the medium and long-term loans of residents and enterprises increased by about 660 billion yuan and 530 billion yuan respectively year-on-year, which was the main drag factor.
Overall, the credit in February was affected by the recurrence of the epidemic, holiday factors and the impulse at the beginning of the year, but the structure was further lower than expected, and the endogenous power of the economy still needs to be repaired. Looking forward to the follow-up, the government work report of the two sessions clearly proposed to increase the total amount of credit and increase services to the real economy. Recently, the real estate field has also been loosened, including increasing the guidance of mortgage lending, reducing mortgage interest rates and down payment ratio in many places, so as to form a certain support for the follow-up credit lending.
In February, credit and undiscounted bills dragged down the growth rate of social finance and fell by 0.3pct
In February, only 1.19 trillion yuan of new social finance was lower than expected, with a year-on-year increase of 531.5 billion yuan under the high base, and the balance growth rate fell 0.3pct to 10.2% month on month. Structurally, it was mainly dragged down by credit and undiscounted bills: 1) in February, the issuance of government bonds and corporate bonds increased by 272.2 billion yuan and 337.7 billion yuan respectively, with an increase of about 170 billion yuan and 200 billion yuan year-on-year, Local government special bonds combined with steady growth is the main policy line this year. 2) Off balance sheet non-standard financing (entrusted loan + trust loan + undiscounted acceptance bill) contracted by 505.3 billion yuan, a year-on-year decrease of 480 billion yuan, mainly due to the seasonal weakening of invoice volume in February, large discount volume, significantly higher discount acceptance ratio, and the contraction of entrusted loan and trust loan. 3) RMB loans to entities amounted to 908.4 billion yuan, a year-on-year decrease of 432.9 billion yuan, which was the main drag factor of social finance. It is expected that the growth rate of new financial institutions such as trust and financing institutions will be strengthened as soon as possible, and the growth rate of special financial institutions such as trust and financing institutions is expected to fall as soon as possible. It is also expected that the growth rate of financial institutions such as trust and financing institutions will be strengthened, and the financial institutions will basically form the support of specific financial institutions.
The growth rate of M1 rebounded, the scissors difference of m1m2 converged, and the marginal capital environment improved
The growth rate of M1 in February was 4.7%, which was significantly higher than that in January (according to the calculation of the central bank, excluding the influence of the wrong time of the Spring Festival, M1 increased by about 2% year-on-year in January); M2 grew by 9.2%, down 0.9pct and 0.6pct respectively on a month on month basis, and the corresponding m1-m2 scissors difference converged to – 4.5%, reflecting the physical capital environment or marginal improvement under deposit activation. The derivation of credit extension promoted the increase of deposits by 2.54 trillion yuan in February, an increase of 1.39 trillion yuan year-on-year. In terms of structure, it shows a pattern of year-on-year contraction of residents’ deposits and more increase of enterprise deposits, which is affected by the dislocation factors of the Spring Festival; Fiscal deposits increased by 1.45 trillion yuan year-on-year, or affected by the pre issuance of local bonds and the balance profits handed over by the central bank, which will help boost the follow-up fiscal expenditure.
Investment suggestions:
The overall volume and structure of credit and social finance data in February were lower than expected. On the one hand, residents’ consumption confidence and purchase intention were weak; on the other hand, the financing demand of enterprises was not strong. The structure was still dominated by short-term loans and bill impulse, and it still took time for the confidence of medium and long-term loans to recover. In addition to credit, the issuance of corporate bonds and government bonds is relatively stable. The rebound of M1 growth rate and the convergence of scissors also reflect the marginal improvement of the capital environment.
Recently, factors outside China have affected the release of pessimistic expectations in the market, the intention of policy steady growth is clear, and the cost performance of the banking sector has improved. The first annual report of listed banks this week has been disclosed, with good performance. Some banks have also disclosed the business profile from January to February, which helps to stabilize market expectations and support the space for subsequent valuation repair. We maintain the “recommended” rating of the industry and continue to recommend at the individual stock level: China Merchants, Ping An, Societe Generale, Ningbo, Chengdu, Hangzhou, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc.
Risk tips
1. The range and pace of economic restoration are lower than expected;
2. Major operational risks of individual banks, etc.
