Source: Securities Times
Just now, the central bank released important data.
On April 12, financial statistics and social financing data for the first quarter of 2024 released by the People's Bank of China (hereinafter referred to as the “central bank”) showed that RMB loans increased by 9.46 trillion yuan in the first quarter, and the cumulative increase in the scale of social financing was 12.93 trillion yuan, all at a high level in the same period in history. Overall, monetary policy advanced in the first quarter, and total credit investment was reasonable and moderate.
At the end of March, the broad currency (M2) balance was 304.8 trillion yuan, up 8.3% year-on-year, in line with the expected targets for economic growth and price levels. Looking at the two-year average growth rate excluding the impact of the high annual base, M2 grew by an average of 10.5% in 2023 and the end of March 2024, which is higher than the average growth rate for the same period 2018 to 2022, and maintained reasonable and abundant liquidity.
Overall, the scale of social financing and loan investment in the first quarter basically met the expectations of market participants, effectively met the reasonable financing needs of the real economy, and was in line with the current economic growth situation. The general opinion in the market is also that reasonable moderation is the main characteristic of the current increase in the scale of credit and social financing. In recent years, the overall growth rate of loans has declined somewhat, but the quality and efficiency of financial services in the real economy has improved markedly.
Credit volume and price were more balanced in the first quarter
In the first quarter of this year, the total amount of loans grew steadily and was distributed in a balanced manner. At the end of March, the balance of various RMB loans was 247.05 trillion yuan, up 9.6% year on year and 0.5 percentage points lower than the previous month. It was mainly affected by factors such as a high base for the same period last year and balanced credit investment by financial institutions.
According to data, RMB loans increased by 3.09 trillion yuan in March, and RMB loans increased by 9.46 trillion yuan in the first quarter. This is a decline from the high base for the same period last year, but still an increase of more than 1 trillion yuan over the same period in 2022. The economic data for the first quarter were generally better than expected, prices rebounded moderately, and the effects of credit support were gradually showing.
Experts pointed out that year-on-year fluctuations in loans were mainly due to base figures. Banks had a “good start” in the first quarter of last year, which caused some overdrafts for the next three quarters. Since the second half of last year, the central bank has focused on guiding financial institutions to strengthen balanced credit investment, avoid capital accumulation and idling, and leave room for sustainable support to the real economy. Lin Yingqi, an analyst at CICC, believes that in the context of “revitalizing stocks,” the phenomenon of credit seeking a “good start” has been clearly mitigated, and the amount and price of credit is more balanced. Loan investment progress in the first quarter has returned to a rate close to 40% over the past five years.
By sector, household loans increased by 1.33 trillion yuan in the first quarter, of which short-term loans increased by 356.8 billion yuan and medium- to long-term loans increased by 975 billion yuan; enterprise (business) unit loans increased by 7.77 trillion yuan, of which short-term loans increased by 2.97 trillion yuan, medium- and long-term loans increased 6.2 trillion yuan, bill financing decreased by 1.5 trillion yuan; and loans from non-banking financial institutions increased by 233.6 billion yuan.
Xiong Yuan, chief economist at Guosheng Securities, said that medium- and long-term corporate financing has maintained relatively rapid growth since this year, which is of great significance in meeting the capital needs of medium- and long-term investment in the real economy and promoting restorative economic growth.
There is still support for the growth rate of the scale of social financing throughout the year
At the end of March, the social financing scale stock was 390.32 trillion yuan, an increase of 8.7% over the previous year, in line with the expected targets for economic growth and price levels. The cumulative increase in the scale of social financing in the first quarter was 12.93 trillion yuan, which is at a high level in the same period in history. Among them, RMB loans issued to the real economy increased by 9.11 trillion yuan; net financing from government bonds was 1.36 trillion yuan.
Although the year-on-year growth rate of large-scale social financing stocks at the end of March was slightly lower than in the previous two months, it was still significantly higher than the nominal economic growth rate. Experts analyzed that the year-on-year growth rate of the social financing scale stock declined, due not only to factors such as the reasonable transfer and issuance of loans for some reserve projects, but also due to the slow progress of government debt issuance. Looking at the full year, the total amount of newly issued government bonds is expected to be close to 9 trillion yuan, new loans will also remain at a reasonable level, the growth rate of social financing is still supported, and support for the real economy remains stable.
Wang Jian, chief financial analyst at Guoxin Securities Economics Research Institute, believes that the current economic structural transformation is accelerating, and that the degree of dependence on credit is declining, credit growth is declining, or even the growth rate of social financing scale is declining, which does not necessarily mean that economic growth is slowing down, because the “GDP/credit (scale of social financing)” created by traditional industries and emerging industries are very different, and emerging industries are expected to bring higher levels of “GDP/credit (social financing scale)”.
Open market trading of treasury bonds in the future or inclusion in policy toolboxes
The data shows that current loan interest rates remain at historically low levels. In March, the weighted average interest rate for new corporate loans was 3.75%, 1 basis point lower than the previous month and 22 basis points lower than the same period last year; the interest rate for new personal housing loans was 3.71%, 15 basis points lower than the previous month, and 46 basis points lower than the same period last year, all at historically low levels.
At the same time, since this year, the “Five Big Articles” of good service by financial institutions have achieved outstanding results. Medium- and long-term loans, green loans, and inclusive small and micro loans from major banks have generally maintained a year-on-year growth rate of more than double digits, which is faster than the growth rate of all loans.
In the face of optimized investment in new loans and improved efficiency in the use of existing funds, Ping An Securities chief economist Zhong Zhengsheng and CITIC Securities chief economist clearly believe that China's credit growth is currently in a “shift in quality” period. Currently, the total amount, structure, stock, and increase of “stable credit” are as important.
The reporter learned that the central bank will also make comprehensive use of various tools to invest in liquidity to ensure the smooth issuance of government bonds. Currently, the market expects that the second quarter may usher in an intensive period of government bond issuance. In particular, special treasury bonds may also begin to be issued. The central bank will flexibly grasp the operational strength of policy instruments such as reverse repurchases in the open market, accurately hedge against the short-term impact of fiscal debt issuance factors, and maintain the smooth operation of market interest rates.
According to expert analysis, in the future, the central bank may include the trading of treasury bonds in its reserves of policy tools to enrich the liquidity management toolbox; however, overall monetary and financial conditions will remain reasonable and moderate. This is fundamentally different from the actions of Europe and the US, where normal monetary policies are exhausted and forced to buy treasury bonds in large quantities.
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