With a drop of 4 trillion in a single month, where are the deposits going?

CBN

2024-05-12 19:07Published on the official account of Shanghai Yicai

In April, RMB deposits fell sharply by nearly 4 trillion yuan, attracting market attention.

Recently, the central bank released a report on financial statistics for April. According to the data, the mainland's RMB deposits increased by 7.32 trillion yuan in the first four months, a decrease of 3.92 trillion yuan from 11.24 trillion yuan in the first quarter. In other words, monthly deposits decreased by nearly 4 trillion yuan in April.

Individual and corporate deposits both declined, of which corporate deposits decreased by 1.87 trillion yuan in April, a year-on-year decrease of 1.73 trillion yuan, and resident deposits decreased by 1.85 trillion yuan, a year-on-year decrease of 650 billion yuan. In this regard, industry insiders explained to the first financial reporter that in the context of seasonal factors and manual interest supplementation under strict supervision, many deposit funds have been transferred to bank wealth management and other asset management products, and many household funds have increased their willingness to "repay loans in advance" under the recent fluctuations in the net value of wealth management products.

Deposits fell by nearly $4 trillion in April

On May 11, the financial data released by the central bank for April showed that RMB deposits increased by 7.32 trillion yuan in the first four months. 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.

Judging from the situation in a single month, RMB deposits decreased by 3.92 trillion yuan in April, of which resident deposits decreased by 650 billion yuan year-on-year, corporate deposits decreased by 1.73 trillion yuan year-on-year, and fiscal deposits increased by about 400 billion yuan year-on-year.

Industry insiders interviewed by this reporter believe that the relatively large contraction of RMB deposits is due to seasonal patterns on the one hand, and on the other hand, due to the fact that banks have taken the initiative to reduce high-interest liabilities under the guidance of supervision. Ming Ming, chief analyst of CITIC Securities, said that the main reason for the decrease in RMB deposits is that since April, many deposit funds have been transferred back to off-balance sheet products such as bank wealth management under the background of seasonal factors and strict supervision of manual interest supplements.

An analyst in the banking industry of a public fund in East China told reporters that the restrictions on high-interest savings tools such as agreement deposits, call deposits, and manual interest supplements are the first to affect the bank's corporate customers, and the current funds of many enterprises have been released and flowed to the wealth management market and the bond market.

"Seasonality also accounts for most of the reasons." The above-mentioned analyst said that the decrease in RMB deposits at the end of April was also due to the fact that the bank's quarter-end assessment point had passed, and the outflow of residents' deposits under the seasonal pattern would be more obvious in April and July every year. This year's downward trend is more obvious than in the past, mainly due to the decrease in the willingness of residents and enterprises to save, especially the decline in corporate deposits, which is caused by the restriction of high-interest savings tools and the decline in deposit interest rates.

The reporter found that compared with the financial data of the past few years, household deposits and corporate deposits mostly showed a downward trend in April. Among them, in 2019~2023, household deposits in April decreased by 624.8 billion yuan, 799.6 billion yuan, 1.57 trillion yuan, 703.2 billion yuan, and 1.2 trillion yuan respectively.

Corporate deposits decreased by 173.8 billion yuan in April 2019, increased by 1.17 trillion yuan in April 2020, and decreased by 355.6 billion yuan, 121 billion yuan, and 140.8 billion yuan respectively in 2021~2023.

In response to the deposit fluctuations at the end of the quarter and the beginning of the quarter, Wang Jian, chief analyst of the financial industry of Guosen Securities, previously said in the report that general deposits (including deposits of non-financial enterprises and personal deposits) increased sharply in the month at the end of the quarter and fell sharply next month; Non-bank deposits, on the other hand, fell sharply in the last month of the quarter and increased again in the following month. He believes that although the growth rate of deposits slowed in April, by the end of June, the figure will rise again.

Where does all the money go?

From a comprehensive market point of view, the relatively sharp contraction of RMB deposits also reflects the decline in the willingness of enterprises and residents to save to a certain extent. Some analysts believe that the decline in the willingness of the household sector to save reflects the gradual recovery of residents' consumer confidence and willingness, especially the increase in the number of tourists in scenic spots before the "May Day" holiday, and the demand for holiday tourism consumption has been released in April in advance.

However, this view is not strongly supported by the data. According to central bank data, residents' short-term loan data also performed poorly in April, with a decrease of 351.8 billion yuan in the month, and a decrease of 166.6 billion yuan in medium and long-term loans, indicating weak consumption willingness. The April price data released by the National Bureau of Statistics showed that the CPI (consumer price index) rose only slightly by 0.3% year-on-year in the month.

The corporate sector is also relatively weak in its willingness to borrow. According to data from the central bank, short-term loans to enterprises decreased by 410 billion yuan in April, a year-on-year decrease of 300 billion yuan, and medium and long-term loans increased by 410 billion yuan, a year-on-year decrease of more than 250 billion yuan. In April, there was a rare negative growth in the increment of social finance, a decrease of 198.7 billion yuan, compared with 1.22 trillion yuan in the same period last year. Another set of data reflecting the production activity of enterprises also confirms this situation, with the PPI (National Industrial Producer Price Index) falling by 2.5 percentage points year-on-year in April, and the recovery momentum was less than expected.

While deposits decreased year-on-year, the bank wealth management market ushered in an uptick in April. According to the estimation of a number of industry insiders, the scale of wealth management products in the whole market increased by about 2 trillion yuan month-on-month in April, ushering in a long-awaited rebound, and it is expected to cross the 30 trillion yuan mark within the year. Dong Ximiao, chief researcher of Zhaolian, believes that the recovery of the wealth management market in the early stage, the rise in investment yields, and the enthusiasm of individuals and enterprises to purchase wealth management products have accelerated the transformation of deposits into wealth management products.

However, with the recent fluctuations in the bond market, many wealth management companies have lowered their performance comparison standards, and many investors have used this part of the funds to "prepay loans" to reduce the cost of leverage. Linglong (pseudonym), who lives in Gongshu District, Hangzhou, told reporters that the deposit interest rate has fallen again and again, and the net value of wealth management has fluctuated greatly recently, and he plans to repay the 300,000 yuan mortgage first to reduce the pressure of repaying principal and interest every month.

Some residents reported to reporters that the bank's prepayment business is still not smooth enough, and some online channels are unusable. The reporter learned from the credit department of a number of joint-stock banks that many new customers came to make appointments for early repayment in April, and at present, they mostly take the form of offline appointments and online independent repayment after the due date, and the agreed time is usually negotiated by each bank and the customer independently. "However, there are a lot of people handling it now, and the business volume is large, and it takes a certain period of time for the bank to deal with it." The credit staff of the Hangzhou branch of a joint-stock bank told reporters.

Although deposits are flowing to wealth management and prepayment, the trend of regularization of deposits has not weakened. The central bank's first-quarter monetary policy implementation report pointed out that the trend of regularization of deposits of enterprises and residents has intensified. The proportion of time and demand deposits has risen from "June Fourth" in 2017 to "July Three" at present. Household time and other deposits grew at a faster rate, with an increase of 7.32% in the first quarter of 2024 from the end of the previous year, much higher than the 0.58% growth rate of time and other deposits of non-financial enterprises.

(This article is from Yicai)

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