Financial Services Association, April 28 (Reporter Cao Yunyi) Today, the Shanghai headquarters of the People's Bank of China held a press conference for the second quarter of 2024 to introduce financial operations in Shanghai in the first quarter of 2024. A Financial Services Association reporter learned from the meeting that corporate financing and residential loans in Shanghai both rebounded in the first quarter, and the trend of fixed-term household deposits weakened.

Industry insiders told the Financial Federation reporter that domestic economic activity has returned to normal, residents' and business confidence has continued to recover, and consumption and investment activities have gradually recovered. Coupled with a gradual recovery in financial market sentiment, residents' savings have gradually returned to normal. It also means that against the backdrop of continuous decline in interest rates on deposits, residents' acceptance of financial management is increasing.

Corporate bond financing picks up, credit growth continues to rise

From January to March, the scale of social financing in Shanghai increased to 329.3 billion yuan. From a structural perspective, RMB loans are the main support for social finance growth, and corporate bond financing has rebounded. Among them, RMB loans issued to the real economy increased by 405.4 billion yuan, or 123% of the current social finance increase. Net financing of corporate bonds increased by 104 billion yuan, an increase of 126 billion yuan over the previous year. Stock financing increased by 5.6 billion yuan, a year-on-year decrease of 36.2 billion yuan. The total reduction in off-balance sheet financing was 181.7 billion yuan.

At the end of March, Shanghai's local and foreign currency loan balance was 11.66 trillion yuan, up 7.8% year on year. The growth rate was 1.4 percentage points lower than the national growth rate. The gap with the national growth rate narrowed 1.6 percentage points year on year; at the end of the month, the growth rate increased 0.8 percentage points month-on-month, the highest since June 2023.

Specifically, corporate financing demand has picked up marginally, and the growth rate of residential loans has picked up. At the end of March, the balance of non-financial corporate loans and household loans increased by 7.9% and 4.5%, respectively. The growth rates were 0.4 and 0.7 percentage points higher than at the end of the previous month, respectively.

Industry insiders told the Financial Federation reporter that the recovery in the growth rate of residents' loans is inseparable from the steady recovery of property markets in hot cities such as Shanghai. Judging from the data, real estate credit in Shanghai was generally stable at the end of March. The balance of RMB real estate loans was 2.75 trillion yuan, up 2% year on year, 0.7 percentage points higher than the same period last year.

According to data from Shanghai Zhongyuan Real Estate, in March 2024, 18,500 second-hand residential units were sold in Shanghai, an increase of 170.22% over the previous month. According to the analysis of Shanghai Central Plains Real Estate, the traditional sales season has arrived, and the second-hand housing market in Shanghai has shown an active trend. On the one hand, listing momentum has improved, returning to the original level of 13,000 units/week. On the other hand, buyers' willingness to enter the market increased, and the pace of transactions accelerated. In March, the transaction exceeded 18,000 units. This level is the highest since April last year.

Wen Bin, chief economist at Minsheng Bank, said that in terms of medium- to long-term loans, with strong support at the policy level, real estate sales improved month-on-month in March, creating a certain “Xiaoyangchun” situation. Meanwhile, corporate loan interest rates and personal housing loan interest rates both declined year-on-year in March, and interest rates on loans in key areas and weak links declined even more.

“Interest rates on loans have continued to drop, and the interest burden on corporate residents has been further reduced, which not only stimulates the credit needs of corporate residents, but also helps maintain the steady and healthy development of the real estate market.” Wen Bin thinks.

Due to the recovery of the capital market and factors such as interest spreads and foreign exchange spreads, loans from non-banking financial institutions and overseas loans are growing rapidly. At the end of March, the balance of loans from non-banking financial institutions and overseas loans increased by 8.7% and 24.2%, respectively, the highest in the past year and 26 months, respectively.

The trend of fixed-term deposits of Shanghai residents weakens the balance of cross-border capital flows

At the end of March, Shanghai's local and foreign currency deposit balance was 20.89 trillion yuan, up 6.7% year on year. The growth rate was 0.9 percentage points lower than the national growth rate, and the gap with the national growth rate narrowed 2.1 percentage points year on year. At the end of March, household deposit balances in local and foreign currency increased 11.5% year on year, and the growth rate declined by 12.6 percentage points year on year. Among them, term and other deposits increased by 1808 billion yuan in the first quarter, a year-on-year decrease of 218.1 billion yuan.

A notable trend is a decline in the regularization of household deposits. Lu Jinzhong, director of the Research and Statistics Department at the Shanghai headquarters of the People's Bank of China, said that this means that against the backdrop of a continuous decline in interest rates on deposits, residents' acceptance of financial management is increasing.

“Major domestic economic activities have returned to normal, residents' and business confidence has continued to recover, consumption and investment activities have gradually revived, and financial market sentiment has gradually picked up, driving residents' savings to normal.” Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, told the Financial Association reporter.

On January 1 of this year, the “Administrative Measures on Bank Foreign Exchange Exhibition Business (Trial)” was officially implemented. How is it progressing so far? Ge Qing, deputy director of the foreign exchange management department at the central bank's Shanghai headquarters, said that at present, more than 10 corporate banks in Shanghai are interested in carrying out exhibition reforms. It is expected that the first batch of banks to launch will complete the exhibition industry reform and implement pilot business in the second half of this year.

Judging from the data, the foreign exchange market in Shanghai ran smoothly in the first quarter, the foreign-related economy was more active, and cross-border capital flows were balanced. The total foreign-related income and expenditure of banks in Shanghai in the first quarter was 1108.6 billion US dollars, an increase of 31% over the previous year, accounting for 33.5% of the country's total foreign-related income and expenditure during the same period, accounting for an increase of 4.7 percentage points over the same period last year. Among them, foreign-related revenue was US$535.4 billion, up 30% year on year; external payments were US$573.2 billion, up 32% year on year.

In the first quarter, Shanghai's travel revenue and expenditure increased 13% year over year. Among them, comparable travel revenue increased 4% year over year, and travel expenses increased 14% year over year. Industry insiders said that as payment facilitation for overseas visitors to China continues to improve, cross-border travel income and expenditure are expected to continue to grow relatively well.