Event overview:
The central bank released financial and social finance data for March: RMB loans increased by 3.13 trillion yuan in March, an increase of 400 billion yuan year-on-year; RMB deposits increased by 4.49 trillion yuan, an increase of 860 billion yuan year-on-year; The growth rate of M2 was 9.7%, which increased by 0.3pct and 0.5pct respectively on the same month on month basis; The growth rate of M1 was 4.7%, unchanged month on month, with a year-on-year decrease of 2.4pct. In March, social finance increased by 4.65 trillion yuan, an increase of 1.27 trillion yuan year-on-year, and the balance at the end of the month increased by 10.6%.
From January to March, RMB loans increased by 8.34 trillion yuan, an increase of 663.6 billion yuan year-on-year; RMB deposits increased by 10.86 trillion yuan, an increase of 2.51 trillion yuan year-on-year; The cumulative increment of social finance was 12.06 trillion yuan, an increase of 1.77 trillion yuan year-on-year.
Analysis and judgment:
In March, the total amount of credit exceeded expectations, and the structure is still not strong
In March, RMB loans increased by 3.13 trillion yuan, an increase of about 400 billion yuan year-on-year. The total amount exceeded market expectations, mainly contributed by enterprise loans, and the margin of residents also improved. Specifically: 1) residential loans: in March, 753.9 billion yuan was added, with a year-on-year decrease of 394 billion yuan under the high base. However, the month on month decrease was significantly improved compared with February. Short term loans and medium and long-term loans became positive, returning to the monthly increase of 384.8 billion yuan and 373.5 billion yuan. There was a comprehensive effect of factors such as the impulse at the end of the quarter and the demand for mortgage policies to support the bottom, but the year-on-year decrease of short-term loans was wider than that in February. 2) Corporate loans: a new 2.48 trillion yuan, a new high over the same period of the previous year, with an increase of 880 billion yuan year-on-year, of which the medium and long-term loans of enterprises increased by 1.34 trillion yuan, which was basically the same as that in the same period of last year. It was mainly driven by short-term loans and bills, with an increase of 430 billion yuan and 470 billion yuan year-on-year respectively. The amount of discount in March hit a new high in recent years, and the bill interest rate showed a bottom rising trend within the month. There are reasons for the increase of billing volume at the supply side, which also reflects some demand repair. In the corresponding increment of corporate loans in March, the proportion of medium and long-term loans also rebounded slightly to 54% compared with the previous month.
In Q1, the overall increase in loans was 8.34 trillion yuan, an increase of 663.6 billion yuan year-on-year. Short term loans and bills from enterprises mainly made up for the gap between resident loans and medium and long-term loans from enterprises. Therefore, on the whole, under the monthly impulse at the end of March, the total recovery increased year-on-year, but the structure is still weak. We believe that there are still positive policy factors underpinning the follow-up credit supply, including the emphasis of the national Standing Committee on steady growth, the establishment of two new types of refinancing, and the loosening of real estate policies. However, commercial housing transactions are still in a downward channel, the momentum at the level of physical demand needs to be repaired, and the recurrence of epidemics in many places also restricts economic activities.
In March, the issuance of government bonds was large, and the growth rate of social finance rose by 0.4pct month on month
Under the loan volume, the new social finance of 4.65 trillion yuan in March also returned, with a year-on-year increase of 1.27 trillion yuan, and the balance growth rate rebounded by 0.4pct to 10.6% month on month. All segments have made positive contributions: 1) in March, the issuance of government bonds increased by 705.2 billion yuan in a single month, with a year-on-year increase of more than 390 billion yuan, and the issuance of new special bonds remained high. Corporate bonds increased by 389.4 billion yuan in a single month, a slight increase of 8.9 billion yuan year-on-year. 2) Off balance sheet non-standard financing (entrusted loan + trust loan + undiscounted acceptance bill) turned negative to positive, with an overall increase of 13.3 billion yuan, with an increase of more than 420 billion yuan year-on-year under the low base. While the discount volume was large in March, the bill supply scale was pushed up, and the increase range of entrusted loan and trust loan was further widened. 3) RMB loans to entities amounted to 3.23 trillion yuan, an increase of 480 billion yuan year-on-year. Q1 in total, the social finance increment reached a new high of 12 trillion yuan, an increase of 1.77 trillion yuan year-on-year, and the off balance sheet non-standard was basically the same. In the same period of last year, on the one hand, the increment came from the support of stable and rising credit, and the loan increment of 8.34 trillion yuan accounted for about 70% of social finance; On the other hand, the net increase of corporate bonds was 1.3 trillion yuan, an increase of 400 billion yuan year-on-year; In addition, government bonds are still the core contribution. In the first quarter of this year, the issuance rhythm of local special bonds was significantly ahead. The quarterly increment of government bonds reached 1.58 trillion yuan, an increase of more than 920 billion yuan year-on-year. The national Standing Committee put forward the requirement of “stepping up the issuance of the remaining special bond quota, completing the issuance before the end of May last year and the issuance before the end of September this year”, which will also support the growth rate of social finance in the second and third quarters.
The scissors gap between the upward and downward growth of M2 widened in a negative direction, and the progress of fiscal expenditure accelerated
In March, the growth rate of M1 was unchanged at 4.7% month on month, that of M2 was 9.7%, and the growth rate of M1 was increased by 0.3pct and 0.5pct respectively, and the m1-m2 scissors difference was – 5%, which was slightly wider than that in February. It is expected that it is mainly due to the promotion of broad currency derivation by credit and the increase of deposit solicitation at the end of the quarter. The deposits of residents and enterprises increased by 762.3 billion yuan and 922.1 billion yuan respectively, but the degree of capital activation has not been further improved. The total deposits in March increased by 860 billion yuan year-on-year; With the accelerated progress of fiscal expenditure, fiscal deposits decreased by 357.1 billion yuan year-on-year and non bank deposits decreased by 300 billion yuan year-on-year. In the first quarter, the overall deposit increment exceeded 10.86 trillion yuan, an increase of more than 2.5 trillion yuan year-on-year. The Financial deposits of residents, enterprises and under the acceleration of issuance increased year-on-year.
Investment suggestions:
Following the significant weakening of social financing and credit data in February, the total amount of data rebounded in March to support the steady increase in the total amount of credit in the first quarter year-on-year. However, it is difficult to say that the credit structure has improved significantly. It is still dominated by short-term loans and bill impulse, and government bonds are the core support of social financing. Considering that the manufacturing PMI fell back to the contraction range in March, the economic momentum is affected by many factors outside China, and the steady growth target is clear, the macro policy may be overweight, and the credit policy needs to be strengthened.
From the perspective of the banking industry, the macroeconomic downward expectation restricts the valuation repair of the sector, but the sector has entered the filling and valuation stage under the expected fulfillment of the recent annual report. The stable credit supply in the first quarter also further ensures the certainty of performance. At present, the dividend yield is at the highest level in history, corresponding to the static pb0 64 times, at the bottom of history. We maintain the “recommended” rating of the sector and continue to recommend at the individual stock level: China Merchants, Ping An, Societe Generale, Chengdu, Hangzhou, Ningbo, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc; And suggest paying attention to big banks with high dividend yield.
Risk tips
1. The range and pace of economic restoration are lower than expected;
2. Major operational risks of individual banks, etc.
