On August 11, the financial data and social financing statistics released by the central bank for July showed that the scale of new credit financing in that month was lower than the market expected. In July, RMB loans increased by 992.7 billion yuan, 63.1 billion yuan less than the same period last year, down 45% from the previous year; the scale of social financing increased by 1.69 trillion yuan, 406.8 billion yuan more than the same period last year, down 50% from the same period last year.

The weakening ability of credit derivation and the diversion of deposits by the hot stock market in July also caused RMB deposits to increase by only 80.3 billion yuan, 561.7 billion yuan less than the same period last year, and broad money (M2) rose 10.7 percent year-on-year, 0.4 percentage points lower than at the end of last month.

Many analysts believe that, on the whole, the July data reflect the characteristics of the pullback in monetary growth, the adjustment of credit term structure, and the slowdown in the increase of social finance, reflecting that after monetary policy emphasizes precise drip irrigation, the pace of credit expansion will slow down, but the loan social finance structure will continue the trend of optimization.

The structure of credit and social finance has been further optimized.

July is an example of a small month of credit, and there are also seasonal factors that have halved the monthly ratio of new credit. However, the smaller-than-expected scale of new credit financing in July may reflect that the pace of credit expansion will also slow in the second half of the year following the gradual withdrawal of the central bank's early aggregate easing policy.

The month-on-month increase in July fell by 45%, which is believed to reflect the cooling of financing demand. In this regard, Everbright Securities Chief fixed income analyst Zhang Xu told the Securities Times that affected by the bank's internal assessment and other factors, credit growth has obvious seasonal characteristics. June and July are the "big months" and "small months" of loan issuance, respectively, so they often reflect a decline in July increments. Over the past four years, for example, credit growth in July has fallen by an average of 43% compared with June. The rate of decline in July this year is similar to that in previous years and is actually a normal seasonal phenomenon.

Although the new credit financing was less than expected, the structure was further optimized. Li Chao, chief economist of Zheshang Securities, said that medium-and long-term loans provided stronger support in July; due to the compression of structured deposits, both off-balance sheet and off-balance sheet bill financing declined, but it did not have a major impact on social financing. with the support of government bonds, corporate bonds and equity financing, the increase in social finance remained high, and the growth rate continued to rise 0.1 percentage points to 12.9% from the previous value.

Zhang Xu also said that in July, both the structure of the loan data and the proportion between the various components of the scale of social integration were further optimized. Specifically, the medium-and long-term proportion of enterprises in loans increases, the proportion of direct financing in social finance increases, and the proportion of non-standard financing decreases. For example, medium-and long-term loans to non-financial companies accounted for 60.1% of the new RMB loans, the highest since 2019; corporate bond financing and domestic equity financing for non-financial enterprises accounted for 21.3% of the new social finance, up 9.9 percentage points from 11.4% in June.

From the perspective of the structure of new credit, it is mainly medium-and long-term financing needs as a whole. In July, real estate sales continued to improve in the previous period, and the growth of medium-and long-term loans for residents remained stable, with 606.7 billion yuan in new loans in the month, while medium-and long-term loans for enterprises increased by 596.8 billion yuan, showing a similarly stable performance. CITIC's collection team believes that the demand for medium-and long-term loans mainly comes from the supply of low-cost credit and the demand for infrastructure financing brought about by the high growth of financial financing. At the same time, the growth rate of narrow money (M1) rose in July, reducing the "M2-M1" scissors gap or indicating an increase in investment demand in the real economy.

The hot stock market promotes deposit diversion, and the pace of credit expansion may slow in the second half of the year.

In addition to the lower-than-expected increase in new credit and social finance, new deposits increased less and more in the month, causing M2 growth to slow. The increase in RMB deposits in July was only 80.3 billion yuan, an increase of 2.8197 trillion yuan and 561.7 billion yuan respectively over the same period last month and last year. M2 year-on-year growth rate was 0.4 percentage points lower than at the end of last month.

As to why new RMB loans increased less and more in July, the hot shunt deposits in the stock market is an important reason. Wen Bin, chief researcher of China Minsheng Banking Corp, said that the increase in RMB deposits in July was less than 100 billion yuan, mainly because in the new quarter, household and corporate deposits were usually turned into off-balance sheet financial management, coupled with a recovery in the stock market and an increase in the scale of fund issues. the diversion of household and corporate deposits.

"in July, new household and corporate deposits increased by 616.3 billion yuan and 160 billion yuan respectively compared with the same period last year, while non-silver deposits increased by 1.8 trillion yuan from the same period last year, which is expected to be related to the return of 'deposit-financing' funds and the entry of funds into the stock market in the new quarter. CITIC solid collection team said that on the whole, the demand for credit funds in the real economy is concentrated in the middle and long end, or related to the governance of "capital idle arbitrage" and the process of economic recovery. Judging from the financial data, the overall recovery rate of fundamentals is likely to remain moderate, while the pace of credit expansion is expected to continue to slow in the second half of the year.

Ming Ming, deputy director of CITIC Research Institute, also said that the speed of wide credit in the first half of the year was fast, behind which was the policy of broad currency and credit expansion. After the return of the ultra-loose policy to normal, the power of broad credit itself is insufficient. As the impact of the epidemic recedes, the fundamentals of stable, long-term and high-quality development of China's economy have not changed. Matching the growth rate of social finance with the growth rate of nominal GDP is the best choice to ensure that finance effectively supports the real economy without creating asset price bubbles and expanding financial risks. it is expected that the expansion of macro leverage will slow rapidly in the second half of the year, year-on-year growth may be flat or slightly lower, and the pace of wide credit will also slow down.

Wen Bin said that the pullback in monetary growth, the adjustment of the credit term structure, and the slowdown in the increase in social integration are not only related to trend factors, but also show that the precise orientation of monetary policy is gradually coming into force, which is not only conducive to the precise rescue of the real economy. it is also conducive to preventing and defusing financial risks. In the next stage, the focus of monetary policy will shift from aggregate easing to structural optimization, reducing the probability of cutting reserve requirements and interest rates, and giving greater play to the role of structural monetary policy tools.