With the release of the April 2024 Financial Statistics Report, what are the new changes in credit, deposits and social financing increments?
According to data disclosed by the People's Bank of China on May 11, in the first four months of 2024, mainland RMB loans increased by 10.19 trillion yuan, RMB deposits increased by 7.32 trillion yuan, and the cumulative increase in the scale of social financing was 12.73 trillion yuan, 3.04 trillion yuan less than the same period last year. As of the end of April, the balance of broad money (M2) was 301.19 trillion yuan, a year-on-year increase of 7.2%; The stock of social financing was 389.93 trillion yuan, a year-on-year increase of 8.3%.
On the whole, credit supply continued to be balanced in April, with the growth rate of M2 and social finance slowing down in the same period, and the quality and efficiency of financial services for the real economy improved. Some analysts pointed out that in the context of weakening the focus on aggregate, it is expected that the People's Bank of China will increase efforts to revitalize the stock of financial resources in the future, pay close attention to the precipitation and idling of funds, promote the improvement of capital use efficiency, and provide better support for high-quality economic development.
Residents' short-term loans and medium- and long-term loans both fell
Credit continued to be balanced
A new issue of financial statistics is released. According to a report released by the People's Bank of China, as of the end of April 2024, the balance of domestic and foreign currency loans in mainland China was 252.41 trillion yuan, a year-on-year increase of 9.1%. The balance of RMB loans at the end of the month was 247.78 trillion yuan, a year-on-year increase of 9.6%.
In the first four months, RMB loans increased by 10.19 trillion yuan. By sector, household loans increased by 813.4 billion yuan, of which short-term loans increased by 5 billion yuan and medium and long-term loans increased by 808.4 billion yuan. Loans to enterprises (institutions) increased by 8.63 trillion yuan, of which short-term loans increased by 2.56 trillion yuan, medium and long-term loans increased by 6.61 trillion yuan, bill financing decreased by 661.9 billion yuan, and loans to non-banking financial institutions increased by 494.3 billion yuan.
Image source: People's Bank of China
A reporter from Beijing Business Daily further found that according to the past data of the People's Bank of China, the increase in RMB loans in the first four months of 2024 decreased by 1.12 trillion yuan year-on-year. Specific to the single month, in April, RMB loans increased by 730 billion yuan, an increase of 11.2 billion yuan year-on-year, by sector, household loans decreased by 516.6 billion yuan in April, a year-on-year decrease of 275.5 billion yuan, of which short-term loans and medium and long-term loans decreased by 351.8 billion yuan and 166.6 billion yuan respectively, and loans to enterprises (institutions) increased by 860 billion yuan in April, an increase of 176.1 billion yuan year-on-year.
Regarding the new credit in April, Wen Bin, chief economist of China Minsheng Bank, believes that the current effect of balanced credit delivery has initially appeared, leaving stamina for loan growth during the year, and more effectively matching the demand of real economic entities. April is a small month for traditional credit, and the scale of credit supply usually falls significantly month-on-month, but under the guidance of the low base of the same period last year and the stable credit rhythm at the beginning of the quarter, new RMB loans in April increased year-on-year, and the growth rate of loan balances remained relatively high.
"In terms of sub-sectors, the long-term loans to the public are relatively stable. In April, the demand for corporate loans weakened seasonally, but driven by factors such as the resilience of external demand, the creation of 500 billion yuan of re-lending tools for scientific and technological innovation and technological transformation, and the promotion of the implementation of real estate financing coordination mechanism projects, the provision of long-term loans to public and medium-sized enterprises remained stable, which is still an important force to support new credit. Wen Bin said.
In terms of resident loans, Wen Bin explained that although tourism-related consumption during the Qingming Festival holiday was relatively active, due to factors such as weak overall consumer demand and the rise in the base of the same period last year, the growth of consumption slowed down in April, making residents' short-term loans fall more. There is no obvious sign of improvement in the real estate sales data, and the pressure on new home mortgage delivery, coupled with the mortgage prepayment rate, although it has declined, is still higher than the average of normal years, all of which have dragged down residents' medium and long-term loans.
In the view of Ming Ming, chief economist of CITIC Securities, credit continued to be balanced in April, leaving room for the second half of the year. In April 2024, about RMB730 billion of new RMB loans were added under the credit caliber, which was basically the same as the same period last year. Although the year-on-year growth rate of credit has declined compared with before, it is in line with the current regulatory guidance for reasonable loan growth, balanced distribution, and enhanced the stability and sustainability of loan growth.
Ming Ming believes that from the perspective of the internal structure of loans, the impulse characteristics of bills are more obvious, and the willingness of enterprises and residents to increase leverage is still weak, reflecting that the overall structure of credit needs to be improved, and the demand for physical financing still needs to be boosted. In the context of weakening the focus on aggregate volume, it is expected that the People's Bank of China will increase its efforts to revitalize the stock of financial resources in the future, pay close attention to the precipitation and idling of funds, promote the improvement of the efficiency of capital use, and provide better support for high-quality economic development.
M2 growth slowed
Deposit products "squeeze water"
In terms of money supply, data showed that as of the end of April 2024, the M2 balance was 301.19 trillion yuan, a year-on-year increase of 7.2%. The balance of narrow money (M1) was 66.01 trillion yuan, down 1.4% year-on-year. The balance of money in circulation (M0) was 11.73 trillion yuan, a year-on-year increase of 10.8%. In the first four months, the net cash injection was 386.6 billion yuan.
In March 2024, the balance of M2 exceeded the 300 trillion yuan mark in one fell swoop, causing heated discussions in the market. Compared with the same period last year, the year-on-year growth rate of M1 turned negative, with a year-on-year increase of 5.3% in April 2023; The year-on-year growth rate of M2 fell to a historical low since statistics began, with a year-on-year increase of 12.4% in April 2023.
Based on the net investment of the People's Bank of China in the first quarter of 2024, the net cash injection in April was 10 billion yuan. Ming Ming said that the obvious decline in the growth rate of money supply is mainly due to the fact that since April, many deposit funds have been transferred to asset management products such as bank wealth management under the background of seasonal factors and strict supervision of manual interest supplements.
"The growth rate of M2 has slowed down, but the quality and efficiency of the financial system in serving the real economy have been further improved." Wen Bin thinks. According to him, the slowdown in the growth of money supply has been affected by a combination of factors, including the bullish bond market since the beginning of the year to boost the yield of asset management products such as wealth management, and the diversion of bank deposits to wealth management; The regulatory authorities have increased the regulation of idling arbitrage of funds, manual interest replenishment by banks, etc., and squeezed out some of the inflated deposits and loans; Third, the accounting of the added value of the financial industry has been optimized, and the motivation of individual local governments to increase the added value of finance through the expansion of deposits and loans has been significantly weakened.
The changes brought about by the relevant influencing factors are also reflected in the deposit data. According to the data, as of the end of April 2024, the balance of RMB deposits in mainland China was 291.59 trillion yuan, a year-on-year increase of 6.6%. In the first four months, RMB deposits increased by 7.32 trillion yuan. Among them, household deposits increased by 6.71 trillion yuan, deposits of non-financial enterprises decreased by 1.65 trillion yuan, financial deposits decreased by 187.4 billion yuan, and deposits of non-banking financial institutions increased by 1.23 trillion yuan.
On a month-on-month basis, the balance of deposits at the end of April decreased by 9.82 trillion yuan compared to the end of March 2024, of which deposits decreased by 3.92 trillion yuan in April. In terms of year-on-year growth, from the perspective of changes in deposits in various departments, resident deposits decreased by about 650 billion yuan year-on-year in April, corporate deposits decreased by about 1.7 trillion yuan year-on-year, and government deposits increased by about 400 billion yuan year-on-year.
Ming Ming pointed out that the decrease in deposits of residents and enterprises confirms the phenomenon of "deposit moving", and the year-on-year decrease in fiscal deposits is mainly due to the slow process of government bond issuance, considering that government bond financing decreased by 550 billion yuan compared with the same period last year, which reflects that the current pace of fiscal expenditure may be marginally slowed down.
However, Ming Ming also emphasized that the decline in money supply this time is mainly due to the "squeezing of water" of some non-compliant deposit products, and is also related to the current more diversified wealth management methods, which cannot be interpreted as a decline in the ability of finance to support the real economy. Not only that, the supervision of deposits will help to activate funds and help finance better support the recovery and development of the real economy.
It is worth mentioning that on May 10, the People's Bank of China released the "First Quarter Monetary Policy Implementation Report", which mentioned that the loans were mainly invested in the supply side of enterprises and the real economy, mainly in infrastructure, real estate, manufacturing and other heavy asset fields, and the medium and long-term loans of enterprises (institutions) accounted for a relatively large proportion. Deposits are mainly concentrated in the residential sector, and the regularization of deposits is intensifying.
The new social finance turned negative
Fiscal policy will be moderately strengthened
According to preliminary statistics, the cumulative increase in the scale of social financing in the first four months of 2024 was 12.73 trillion yuan, 3.04 trillion yuan less than the same period last year.
thereinto RMB loans to the real economy increased by 9.44 trillion yuan, a year-on-year decrease of 1.7 trillion yuan; foreign currency loans to the real economy increased by 121.3 billion yuan, an increase of 92.6 billion yuan year-on-year; entrusted loans decreased by 90.6 billion yuan, a year-on-year decrease of 167 billion yuan; trust loans increased by 212.6 billion yuan, an increase of 204.8 billion yuan year-on-year; undiscounted bank acceptance bills increased by 101.4 billion yuan, a year-on-year decrease of 232.7 billion yuan; net financing of corporate bonds was 1.17 trillion yuan, an increase of 9 billion yuan year-on-year; and net financing of government bonds was 1.26 trillion yuan, a year-on-year decrease of 1.02 trillion yuan； The domestic stock financing of non-financial enterprises was 94.9 billion yuan, a year-on-year decrease of 219.4 billion yuan.
Specifically, in April, the new social finance showed a negative trend, with a year-on-year decrease of 198.7 billion yuan. As of the end of April 2024, the stock of social financing in mainland China was 389.93 trillion yuan, a year-on-year increase of 8.3%, a slight decrease from 8.7% at the end of March, a decrease of 0.4 percentage points.
Ming Ming believes that the year-on-year decline in social finance is mainly due to weak bond financing. From the perspective of social financing items, it is mainly due to the decline in the scale of undiscounted acceptance bills and government bonds. The former is mainly due to the decline in the impulse of bank bills and the willingness of enterprises to issue bills, while the latter is due to the slow issuance of government bonds and local government bonds.
"Considering the decline in land transfer fees, the slow progress of special bond issuance, and the limited financial resources of local governments, the follow-up government bond financing will be accelerated, and it is expected that there will be a significant boost to social finance." Ming Ming added.
Wen Bin also believes that the subsequent accumulation of favorable factors such as the additional issuance of special treasury bonds, the acceleration of the volume of special bonds, and the steady expansion of credit will form a stable support for the growth rate of social finance.
Liu Tao, a senior researcher at the Guangkai Chief Industry Research Institute, expects that after May, as the economic recovery momentum is further stabilized, and the issuance of corporate bonds and local government special bonds is accelerated, the scale of credit and social financing is expected to gradually rebound.
For the changes in monetary policy and fiscal policy in the next stage, Wen Bin pointed out that the active fiscal policy will be moderately strengthened, and the issuance of 1 trillion yuan of ultra-long-term special treasury bonds and local bonds will be accelerated, which is expected to form an effective support for the growth rate of social finance; The prudent monetary policy is precise and effective, there is still some room for RRR and interest rate cuts, and the structural monetary policy tools are focused, reasonable and moderate, and there are advances and retreats, and the "five major articles" areas and reasonable consumer financing needs will be more targeted to meet. With the gradual emergence of demand-side policies such as fiscal policy and equipment renewal, it will help smooth production and consumption, promote investment and stabilize growth.
Wen Bin stressed that the current money stock is not low, in addition to guiding the reasonable growth of credit and balanced delivery, efforts should be made to revitalize the stock of financial resources, avoid the idling of capital precipitation, improve the output efficiency of credit resources, and promote the accelerated development of direct financing, and guide the financing structure to be more suitable for the transformation and upgrading of the economic structure, which is also the focus of the next step, so as to achieve reasonable growth in quantity and effective improvement in quality, and meet the needs of high-quality economic development.