Social finance increased year-on-year, exceeding market expectations
In March, social finance increased by 1.28 trillion yuan year-on-year in a single month, exceeding the market expectation of 253.2 billion yuan. The growth rate of social finance rose again after falling in February. At the end of March, the stock increased by 10.55% year-on-year, an increase of 0.34pct over the previous month. Among them, RMB loans, direct financing and indirect financing increased by more than 400 billion yuan year-on-year.
In March, the pace of credit supply was low before and high after
Previously, due to the outbreak of a new round of epidemic in many places and the continued downturn of the property market, the market was more worried about credit in March. But in fact, the year-on-year increment of credit in March was outstanding, even reaching a new high in nearly 13 months. After a brief adjustment in February, the pace of credit supply rose again in March.
The total amount of enterprise short-term loans + bill financing + undiscounted bank acceptance bills increased by 1.16 trillion yuan year-on-year, accounting for 91% of the new increment of RMB loans. We expect large state-owned banks to take the lead and increase credit in mid and late March. In fact, the bill discount rate rose sharply after March 24, reflecting a very clear policy attitude, that is, if the demand for steady growth remains unchanged, the wide credit must be implemented. In addition, although the medium and long-term loans of enterprises increased by only 14.8 billion yuan year-on-year, the trend of less increase in February has been changed, and the positive signal significance deserves more attention. Fiscal policy and monetary policy have made concerted efforts, and the superimposed epidemic has been gradually controlled. With the improvement of economic fundamentals, medium and long-term loans of enterprises are in restorative growth.
The performance of residential loans was relatively sluggish, and short-term loans and medium and long-term loans still increased less year-on-year. The weakness of short-term loans reflects that under the current environment, residents’ consumption still tends to be rational and conservative, and some of them are affected by the impact of epidemic prevention and control on outbound consumption. We believe that the long-term weakness of the commercial housing loan market is mainly due to the continued weakness of the commercial housing market. Since March, the relaxation policies of the real estate market in many places have been stepped up layer by layer, and from 30 large and medium-sized cities to the second and third tier small and medium-sized cities have bloomed in an all-round way. In addition to reducing the down payment ratio and mortgage interest rate, some cities even cancelled the purchase restriction measures. Residents have a heavy wait-and-see mentality, and the policy effect is relatively lagging behind. The subsequent house purchase demand is expected to gradually recover with the improvement of stimulus. In March, government bonds were issued, and the net financing amount and year-on-year increase in a single month exceeded those in the previous two months, which also formed a significant support for the stabilization and upward of social finance. The strength of government bonds reflects the determination of fiscal policy to avoid economic stall. With the accelerated commencement of epidemic mitigation projects, the effectiveness of the policy is more lasting.
The credit extension is stronger than expected, which is worthy of further expectation
The fact that social finance exceeded expectations in March reflects the determination and patience of steady economic growth. At present, there is no need to demand the synchronous improvement of aggregate and structure, but should pay more attention to the positive signals released by policies. In March, under the outbreak of the epidemic in many places and the property market did not recover significantly, the credit still achieved a high-scale year-on-year increase. The effect of credit expansion in April is worth looking forward to. Broad credit under the demand of steady growth is the main logic of banks, and then the bank risk resolution driven by the reversal of real estate policy. With the gradual control of the epidemic in the second quarter and the gradual improvement of credit relief, banks are expected to continue to benefit. Recommend Postal Savings Bank Of China Co.Ltd(601658) , Bank Of Jiangsu Co.Ltd(600919) , Wuxi Rural Commercial Bank Co.Ltd(600908) and Industrial Bank Co.Ltd(601166) .
Risk warning: the epidemic situation will affect the macroeconomic recovery; Credit demand is less than expected; Credit risk fluctuation
