Direct tool transformation and upgrading, Pratt & Whitney microenterprises welcome the “policy gift package”
According to the deployment of the national standing committee meeting on December 15, the central bank will implement the continuous conversion of two direct tools, the inclusive small and micro enterprise loan extension support tool and the inclusive small and micro enterprise credit loan support plan, from January 1, 2022. Specifically:
1) Convert the Pratt & Whitney small and micro enterprise loan extension support tool into Pratt & Whitney small and micro loan support tool. Financial institutions and enterprises independently negotiate loan repayment of principal and interest according to the principle of marketization. From 2022 to the end of June 2023, the people’s Bank of China will provide funds according to 1% of the increment of the balance of inclusive small and micro loans of local corporate banks (previously the loan principal), operate quarterly (if the balance increment in the current quarter is negative, the increment will be calculated after making up in subsequent quarters), and encourage the continuous increase of inclusive small and micro loans.
This policy is more an incentive mechanism to encourage local corporate banks to increase the investment of inclusive small and micro loans than a rigid requirement, reflecting the principle of marketization. At the end of September 2021, the balance of inclusive small and micro loans of local corporate banks (urban commercial banks + rural financial institutions) was 8.57 trillion. Assuming the current growth rate of about 20% in the future, it is expected that by the end of June 2023, the balance will increase to about 11.9 trillion, with an increase of about 300 billion from the beginning of 2022. According to a rough calculation of 1%, the total subsidy is about 30 billion yuan, and the annualization in 2022 is about 17.7 billion yuan, It is about 4% of the net profit of local small and medium-sized banks in 2021 (the net profit of urban commercial banks + rural commercial banks in the first three quarters of 2021 is 372.5 billion yuan, which is about 441.4 billion yuan annualized according to the proportion of the first three years).
2) From 2022, the Pratt & Whitney credit loan support plan for small and micro enterprises will be incorporated into the management of re loan for supporting agriculture and supporting small businesses. The original 400 billion yuan refinancing line can be used on a rolling basis. If necessary, the refinancing line can be further increased, and the Pratt Whitney credit loan support plan for small and micro enterprises will no longer be implemented. Since December 7, 2021, the central bank has lowered the interest rates of agricultural re loan and small re loan by 0.25pc, and the three-month / six-month / one-year interest rates are 1.7% / 1.9% / 2% respectively (the upper limit of the preferential interest rate for local legal person financial institutions to issue loans with the special line of agricultural re loan is LPR + 50bps in the latest year, i.e. 3.80% + 0.5% = 4.3%), Qualified local legal person banks may continue to apply to the people’s Bank of China for preferential financial support for agricultural and small refinancing with inclusive small and micro credit loans. According to the Q3 monetary policy implementation report, since the introduction of the policy in June 2020 to the end of September 2021, the original inclusive small and micro credit loan support tool has provided 274.4 billion yuan of preferential funds to local corporate banks, supporting them to issue 765.1 billion yuan of credit loans to small and micro enterprises. Subsequent local banks will apply for corresponding preferential fund support according to their own conditions, Embody the principle of “marketization”.
On the whole, the transformation and upgrading of the two direct tools continued the tone of supporting the development of Pratt Whitney’s small and micro businesses, helped to stabilize the overall market of macroeconomic development, and more reflected the market-oriented operating principle. It is expected that local small and medium-sized banks with rich experience in small and micro businesses and in place risk control will fully benefit, such as Bank Of Ningbo Co.Ltd(002142) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) .
The macro Prudential policy framework was introduced to further improve the regulatory framework
On December 31, the people’s Bank of China issued the macro Prudential policy guidelines (for Trial Implementation), clarifying the elements of China’s macro Prudential policy framework and promoting the healthy development of the financial system.
1. The main objective of the implementation of macro Prudential policy is to prevent systemic financial risks (risk sources include two dimensions of time and structure). The monitoring focus includes: macro leverage ratio, debt level and solvency of government, enterprises and household sectors, financial institutions, financial markets, financial products and financial infrastructure with systemic importance and strong risk spillover.
2. Macro Prudential tools are divided into 9 categories in two dimensions: 1) time dimension tools: used for counter cyclical adjustment and smoothing the pro cyclical fluctuation of the financial system, including capital management, liquidity management, asset liability management, financial market transaction behavior and cross-border capital flow management; 2) Structural dimension: by improving the regulatory requirements for key nodes of the financial system, prevent systemic financial risks from cross institutional, cross market, cross sectoral and cross-border infection. Including additional regulatory provisions of specific institutions, financial infrastructure management, cross market financial product management, risk disposal and other management tools to block risk infection.
3. Strengthen policy coordination: 1) strengthen the coordination and cooperation between macro Prudential policy and monetary policy, including strengthening information communication and exchange in economic situation analysis and financial risk monitoring; In the process of macro Prudential policy-making, consider the orientation of monetary policy, fully solicit the opinions of monetary policy-making departments, and evaluate the possible spillover and superposition effects of policy introduction; 2) Strengthen coordination and cooperation with micro prudential supervision, including comprehensively considering the micro prudential supervision environment in the process of macro Prudential policy formulation, fully soliciting the opinions of micro regulatory authorities, evaluating the possible spillover and superposition effects of policy introduction, and jointly formulating macro Prudential management requirements with micro regulatory authorities when involving the areas under the jurisdiction of micro regulatory authorities; 3) We will strengthen coordination and cooperation with national development plans, fiscal policies, industrial policies and credit policies, and improve the ability of financial services to the real economy.
The Q4 bankers’ questionnaire shows that the economic heat has declined month on month, but the industrial profit structure has improved, the PMI has increased for two consecutive months, the steady growth has gradually developed, and is optimistic about the small credit peak of 22q1
1. Q4 banker questionnaire: 1) banker macroeconomic heat index: 21q4 was 35.3%, which continued to decline by 3.4pc compared with Q3; 2) Loan demand index: the overall credit demand index of 21q4 was 67.7%, down 0.6pc month on month. By industry, the manufacturing industry / Infrastructure / real estate industry / wholesale and retail industry were 67.0% / 60.8% / 44.4% / 62.1% respectively. Except that the wholesale and retail industry increased by 1.6pc, the others decreased by 0.4pc/2.3pc/0.9pc respectively; Large and medium-sized enterprises were 57.1% / 60.5% / 70.5%, large enterprises increased by 0.9pc, and small and medium-sized enterprises decreased by 0.2pc and 1.6pc respectively. 3) The banking boom index was 70.2%, 0.3pc higher than Q3, and the profit index was 64.8%, 0.4pc lower than Q3.
2. Improvement of profit structure of industrial enterprises: from January to November, the total profits of national industrial enterprises above Designated Size accumulated 38.0% year-on-year, and the two-year compound growth rate was 18.9% (the same period in 2019 was – 8.29%). Although the growth rate decreased slightly by 4pc, the structure was improved. From January to November, the profit proportion of upstream (mining + raw materials) decreased by 0.06 percentage points to 52.36%, of which the single month proportion in November decreased by 8.5 percentage points to 51.8%, The squeeze of upstream on midstream and downstream profits has improved.
3. PMI rebounded for two consecutive months: in December, the PMI of manufacturing industry was 50.3% (the former value was 50.1%), and that of non manufacturing industry was 52.7% (the former value was 52.3%). Among them, the PMI of large and medium-sized enterprises rose by 1.1 and 0.1pc to 51.3% and 51.3% respectively, and the PMI of small enterprises fell by 2.0 percentage points to 46.5%, which may be related to the continuous and repeated epidemic situation in China recently.
On the whole, under the tone of “stable growth”, with the real estate stability maintenance + infrastructure development (recently, the Ministry of finance has issued a new special debt limit of 1.46 trillion yuan in 2022 to all localities in advance, which will be issued and used in the first quarter of next year), Q1 credit is expected to usher in a “small peak”.
What are the concerns in the work outlook of the central bank in 2022?
1. Prudent monetary policy should be flexible and appropriate: make comprehensive use of a variety of monetary policy tools, maintain reasonable and sufficient liquidity, enhance the stability of the growth of total credit, increase support for the real economy, and keep the growth of money supply and social financing scale basically match the growth of economy. We will improve the formation and transmission mechanism of market-oriented interest rates, promote the steady decline of comprehensive financing costs of enterprises, and continue to transfer profits from the financial system to the real economy. 2. Accurately increase financial support in key areas. Including inclusive small and micro enterprises, scientific and technological innovation, carbon neutralization, green finance, rural revitalization, etc. (it is expected to be the key policy direction in 2022). 3. Further improve the macro Prudential policy framework and governance mechanism. Improve the systematic risk monitoring and evaluation framework and carry out macro Prudential stress test; Steadily and orderly promote the approval of financial holding companies and carry out continuous supervision; Implement additional supervision of systemically important banks. 4. We will continue to promote the prevention and resolution of financial risks. Strengthen the supervision of capital and platform enterprises according to law, and continue to do a good job in the rectification of online financial platforms. We will steadily implement the prudent management system of real estate finance, better meet the reasonable housing needs of property buyers, and promote the virtuous circle and healthy development of the real estate industry. 5. We will continue to deepen international financial cooperation. Including continuously promoting the orderly opening of the financial industry. 6. We will continue to deepen financial reform. Including the supervision of financial infrastructure, the reform and opening up of the bond market, and the improvement of market management systems such as currency, bills, gold and derivatives. 7. Further optimize foreign exchange management and services. 8. Comprehensively improve the level of financial services and management.
Regular data tracking: 1) interbank certificates of deposit: A. volume: according to wind data, the issuance scale of interbank certificates of deposit this week was 0.32 trillion yuan, an increase of 0.25 trillion yuan over last week; Since December, the issuance scale of interbank certificates of deposit has been 1.91 trillion yuan, with a month on month decrease of 0.25 trillion yuan; B. Price: the issuing interest rate of interbank certificates of deposit this week was 2.75%, down 2bps from last week; So far this month, the issue interest rate is 2.74%. 2) Trading volume: the average daily turnover of stocks this week was 1.01 trillion yuan, a decrease of 74.555 billion yuan compared with last week. 3) Liangrong: the balance of Liangrong was 1.84 trillion yuan, a decrease of 0.48% over last week. 4) Fund issuance: non monetary funds issued 32.207 billion shares this week, down 49.659 billion from last week. 5) Bill interest rate: the 3-month discount rate of bank notes of large state-owned banks + joint-stock banks this week was 0.83%, an increase of 80bps compared with last week; The interest rate so far this month is 0.56%, down 124bps from last month. The 3-month bank note discount rate of urban commercial banks was 1.27%, up 120bps month on week, and 0.84% so far this month, down 122bps month on month. 6) Issuance scale of local government special bonds: 11.100 billion new special bonds were issued this week, an increase of 5.687 billion month on week. Since the beginning of the year, a total of 3.60 trillion (the annual amount was 3.65 trillion) has been issued.
Risk tip: the risks of real estate enterprises erupt intensively, and the macro-economy is down; The promotion of capital market reform policy is less than expected; The sales of guaranteed products of insurance companies were lower than expected.
