Talk every Monday: Comments on financial data in February – weak demand for medium and long-term loans
Event: on March 11, the central bank released financial data for February 2022. Among them, the increment of social financing scale in February 2022 was 1.19 trillion yuan, 534.3 billion yuan less than the same period last year. The stock of social financing scale increased by 10.2% year-on-year and decreased by 0.3pct month on month.
Analysis of social financing scale: weak loan demand + financial pre effect
In February, the scale of social financing increased by 1.19 trillion yuan, a year-on-year decrease of 534.3 billion yuan, which was mainly driven by corporate bonds and government bonds. The financial pre effect was obvious. Social financing was mainly dragged down by RMB loans. Specifically:
From the perspective of on balance sheet financing, RMB loans increased by 908.4 billion yuan in February, a year-on-year decrease of 432.9 billion yuan, and foreign currency loans increased by 48 billion yuan, a year-on-year increase of 1.6 billion yuan. The credit growth was lower than expected, mainly because the residents’ medium and long-term loans were affected by the real estate policy and the enterprises’ medium and long-term loan demand was weak.
From the perspective of off balance sheet financing, entrusted loans fell by 7.4 billion yuan and trust loans fell by 74.1 billion yuan in February, with a year-on-year decrease, mainly due to the end of the transition period of new asset management regulations. On the whole, the regulatory policy on non-standard financing is still relatively strict, but the rectification of new regulations on asset management has been completed. It is expected that the pressure drop of overall off balance sheet financing in 2022 will be lower than that in 21 years.
In terms of direct financing, 337.7 billion yuan of corporate bonds and 58.5 billion yuan of domestic stocks of non-financial enterprises were added in February, an increase of 202.1 billion yuan and a decrease of 10.8 billion yuan respectively year-on-year, corresponding to the acceleration of the addition of government bonds, indicating that the effect of infrastructure development is gradually emerging.
In February, 272.2 billion yuan of government bonds were added, an increase of 170.5 billion yuan year-on-year, and the financial pre effect was obvious. In February, government bonds continued the high growth trend since October last year. It is expected that the issuance of local government special bonds in early 2022 will continue to drive social finance.
Analysis of RMB loans: the demand for medium and long-term loans of residents + enterprises is weak
In February, RMB loans increased by 1.23 trillion yuan, an increase of 130 billion yuan less than the same period last year. Among them, the scale of bill financing increased by 490.7 billion yuan year-on-year, and the scale of medium and long-term loans decreased by 1.05 trillion yuan year-on-year, reflecting the lack of effective credit demand. Specifically, for sub sectors:
RMB loans to the residential sector decreased by 336.9 billion yuan, a year-on-year decrease of 479 billion yuan, of which short-term loans decreased by 291.1 billion yuan, a year-on-year decrease of 22 billion yuan. Medium and long-term loans decreased by 45.9 billion yuan, an increase of 457.2 billion yuan year-on-year, with a negative increase for the first time, mainly due to the reduced demand for residential mortgage loans, which is mutually confirmed by the weak real estate sales data. At present, many places have relaxed the marginal of real estate policies, and we need to pay attention to the driving effect of urban policies on real estate sales in the future.
Short term loans to the enterprise sector increased by 411.1 billion yuan, an increase of 161.4 billion yuan year-on-year. The medium and long-term loans of enterprises increased by 505.2 billion yuan, a year-on-year decrease of 594.8 billion yuan. On the one hand, the base number was high in February of 21, on the other hand, the pressure of real estate enterprises was high, and the capital expenditure and medium and long-term financing demand of manufacturing enterprises were still weak. The net financing amount of bills was 305.2 billion yuan, an increase of 490.7 billion yuan year-on-year, showing a bottom impulse phenomenon.
Deposit side analysis: the acceleration of local bond issuance has driven the increase of Financial deposits
At the end of February, the balance of M2 was 244.2 trillion yuan, an increase of 9.2% year-on-year and a decrease of 0.6% month on month; The balance of M1 was 62.16 trillion yuan, an increase of 4.7% year-on-year and 6.6% month on month, which was related to the Spring Festival and the low base of last year.
In February, RMB deposits increased by 2.54 trillion yuan, an increase of 1.39 trillion yuan year-on-year. The balance of RMB deposits increased by 9.8% year-on-year, and the growth rate increased by 0.6pct month on month. Among them, the new deposits of residents decreased by 3.55 trillion yuan year-on-year, and the new deposits of enterprises increased by 2.56 trillion yuan year-on-year, which is related to the dislocation of the Spring Festival. Fiscal deposits increased by 600.2 billion yuan this month, an increase of 1.45 trillion yuan year-on-year, which is related to the increase in the issuance of local government bonds in February.
Investment strategy: Generally speaking, the social finance data in February was significantly lower than expected, mainly because the medium and long-term loans of residents and enterprises were weak. On the one hand, we need to pay attention to the effect of the implementation of real estate easing policies in the future, such as the recent underground adjustment of down payment ratio, mortgage interest rate and so on. On the other hand, we need to pay attention to the effect of fiscal policy. Recently, the two sessions proposed that fiscal expenditure should be increased by more than 2 trillion yuan year-on-year. In the future, with the gradual implementation of fiscal policy, enterprises’ pessimistic expectations for the economy will be revised, driving enterprises’ medium and long-term loan demand to gradually recover, and the growth rate of social finance will stabilize and rebound.
For banks, the fastest stage of credit contraction has passed. With the policy underpinning the economy, the business environment will continue to improve. It is suggested to focus on high-quality banks with stable operation and regional advantages, such as Postal Savings Bank Of China Co.Ltd(601658) , China Merchants Bank Co.Ltd(600036) , Bank Of Ningbo Co.Ltd(002142) , Bank Of Nanjing Co.Ltd(601009) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , etc.
Risk warning: policy risk; The risk of macroeconomic recovery falling short of expectations; Risk of continuous deterioration of covid-19 epidemic in the world
