Event overview:
The central bank released the financial and social finance data for December 2021: RMB loans increased by 1.13 trillion yuan in December, a year-on-year decrease of 123.4 billion yuan; RMB deposits increased by 1.16 trillion yuan, an increase of 1.37 trillion yuan year-on-year; The growth rate of M2 was 9%, with a year-on-year decrease of 1.1pct and a month on month increase of 0.5pct; M1 increased by 3.5%, decreased by 5.1pct year-on-year and increased by 0.5pct month on month. In December, social finance increased by 2.37 trillion yuan, a year-on-year increase of 720.6 billion yuan, and the balance increased by 10.3%.
In 2021, a total of 19.95 trillion yuan of new RMB loans were added, an increase of 315 billion yuan year-on-year; RMB deposits increased by 19.68 trillion yuan, an increase of 32.3 billion yuan year-on-year; The cumulative increment of social finance was 31.35 trillion yuan, a year-on-year decrease of 3.44 trillion yuan.
Analysis and judgment:
In December, residents’ credit demand weakened, and corporate loans were still dominated by bill impulse
In December, RMB loans increased by 1.13 trillion yuan, a year-on-year decrease of 123.4 billion yuan, and the balance growth rate was 11.6%, which was 1.2pct and 0.1pct lower than the same month on month, mainly due to the drag of residents. At the same time, the total amount of corporate loans was stronger than seasonal, but the structure was still weak: 1) residents’ Loans: 371.6 billion yuan was increased in December, a year-on-year decrease of 191.9 billion yuan, of which the monthly increase of short-term loans was only 15.7 billion yuan, The increase of medium and long-term loans was 355.8 billion yuan, which was also the lowest since the epidemic in February 2020. Short term loans and medium and long-term loans increased by 98.5 billion yuan and 83.4 billion yuan respectively year-on-year, both weaker than seasonality. 2) Corporate loans: 662 billion yuan was added in December, slightly improved compared with the same month on month, but the increment was mainly contributed by bill discount. The bill added 408.7 billion yuan in a single month, a new high since February 2019, and exceeded the medium and long-term loan scale of enterprises in the same period for the first time in recent three years; Enterprise short-term loans contracted by 105.4 billion yuan, a year-on-year decrease of 200 billion yuan under the low base, while medium and long-term loans continued to increase by 210 billion yuan year-on-year. The amount and structure of credit at the end of the year are weak, reflecting the weak demand. At the same time, there are also factors for reserve projects at the beginning of the year.
Throughout the year, loans increased by 19.95 trillion yuan, a year-on-year increase of 315 billion yuan, mainly from the significant increase of medium and long-term loans for residents, medium and long-term loans for enterprises and ticket stickers (an increase of 1300, 430 and 761.1 billion yuan respectively year-on-year), as well as the year-on-year decrease of non bank financial loans. In terms of rhythm, the whole line of resident loans weakened in the second half of the year, and enterprise loans turned from long-term high-volume in junior high school to bill impulse.
Looking forward to 2022, there is uncertainty about the repeated disturbance of the epidemic to the macro economy. The positive factors come from the policy stability and bottom support in terms of aggregate and structure. It is expected to boost the financing willingness of enterprises and support the basically stable credit growth with the “good start” of credit at the beginning of the year and the increase of fiscal policy.
The growth rate of social finance continued to rise slightly, and the amount of government debt financing was the main contribution
In December, social finance increased by 2.37 trillion yuan, an increase of 720.6 billion yuan year-on-year, and the balance growth rate increased by 0.2pct to 10.3% month on month. In October, the inflection point of social finance was basically established, and the government debt was still the main contribution at the end of the year. At the same time, both direct financing and external low base had positive contributions: 1) in December, the net increase of government bonds was 1.17 trillion yuan, which was the second highest month since statistics were available, with an increase of 459.2 billion yuan year-on-year. 2) The issuance of corporate bonds with a low base increased by 178.9 billion yuan year-on-year in a single month, while equity financing increased by 211.8 billion yuan in a single month, an increase of about 100 billion yuan year-on-year, which is super seasonal. 3) At the end of the year, the transition period of the new regulations on asset management ended, and the off balance sheet non-standard financing continued to shrink (the overall contraction of entrusted loans + trust loans + undiscounted acceptance bills was 641.4 billion yuan, but the year-on-year decrease under the low base was about 100 billion yuan). 4) RMB loans to entities still decreased by 111.2 billion yuan year-on-year.
Throughout the year, the cumulative increment of social finance in 2021 was 31.35 trillion yuan, a year-on-year decrease of 3.44 trillion yuan, and the loan was basically stable, including the year-on-year contraction of the scale of corporate bonds, off balance sheet and government bonds. On the margin, social finance returned to positive growth year-on-year in the fourth quarter, and the growth inflection point appeared, mainly supported by the acceleration of the issuance of corporate bonds and government bonds.
Looking forward to 2022, under the policy setting of “steady growth”, it is expected that the total amount of credit will still be supported. At the same time, the pace of local bond issuance will be ahead, and it is urged to accelerate the formation of physical workload, which is expected to boost the demand for supporting financing, and social finance will show a slight recovery trend.
The growth rate of m1m2 rebounded month on month, and the bottom of the scissors difference stabilized
In December, the growth rates of M1 and M2 were 3.5% and 9% respectively, with a year-on-year decrease of 5.1pct and 1.1pct. At the same time, they both rebounded by 0.5pct month on month, the bottom of the scissors difference stabilized, and the capital environment of the enterprise was relatively stable under the support of reducing reserve requirements and interest rates at the end of the year.
In December, deposits increased by 1.16 trillion yuan, an increase of 1.37 trillion yuan year-on-year, of which residents, enterprises and non bank deposits increased by 215.7 billion yuan, 271.1 billion yuan and 175.6 billion yuan respectively year-on-year, and fiscal deposit expenditure decreased by 76.2 billion yuan year-on-year. The annual deposit increment is basically the same. In 2020, the structure presents a pattern of transfer of resident and enterprise deposits to non bank deposits.
Investment suggestions:
In December, the credit volume and structure continued to be weak, with the factors of project reserve at the end of the year, which more reflected that the demand needed to be improved; The growth rate of social finance continued to pick up, driven by the strength of government bonds, less non-standard reduction under low base and more increase in corporate debt financing. This year, with the support of broad monetary policy and active fiscal policy, the overall financing environment is expected to continue to be stable.
Recently, the banking sector has recorded absolute and relative returns. From the perspective of attribution, there are the underpinnings of total and structural macro policies, the phased mitigation of real estate risk, the catalysis of the beautiful performance of bank performance express since the beginning of the year, and the phased switching of capital style. The bank valuation has been repaired to a certain extent. We believe that at the present stage, the sector has high cost performance, and the valuation of the sector is expected to continue to be repaired under the support of performance. We continue to recommend: China Merchants, Ping An, Societe Generale, Ningbo, Chengdu, Hangzhou, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc.
Risk tips
1. The downward pressure on the economy continued to increase, and the credit cost increased significantly;
2. Business differentiation of small and medium-sized banks, major business risks of individual banks, etc.
