Behind the unexpected financial data in June： Why did residential loans go up, and how to follow up？

　　Under the influence of the steady growth policy and the bank’s quarter-end impulse, both corporate and residential sector financing strengthened in June, driving the scale of new RMB loans and social financing to grow beyond expectations.

　　According to the latest data released by the People’s Bank of China on July 11th, RMB loans increased by 3.05 trillion yuan in June, up by 229.6 billion yuan year-on-year, and social financing increased by 4.22 trillion yuan, down by 985.9 billion yuan year-on-year, still better than market expectations. The social financing stock increased by 9.0% year-on-year, down by 0.5 percentage point from the end of last month.

　　For the unexpected financial data in June, the market tends to think that it should be treated rationally.

　　It can be seen that by the end of June, the year-on-year growth rates of M1 and M2 were 3.1% and 11.3%, respectively, down by 1.6 percentage points and 0.3 percentage points from the previous month, and the scissors difference of "M1-M2" was -8.2%, further expanding from -6.9% in May, indicating that the degree of currency activation still needs to be improved.

　　Why did residents’ loans increase more?

　　Corporate loans are still the main force of new credit in June, but the market is more concerned about the unexpected recovery of residential loans. Data show that in June, new residential loans reached 963.9 billion yuan, an increase of 115.7 billion yuan year-on-year, of which short-term loans and medium-and long-term loans increased by 63.2 billion yuan and 46.3 billion yuan respectively.

　　Under the background that the real estate sales data has not improved, the market tends to think that the early repayment of loans is an important reason.

　　The team of Zheshang Securities Bank believes that residents’ short-term loans increased by 63.2 billion yuan year-on-year in June, reflecting the continuous repair of residents’ consumption and the increase in consumer loans by banks; Residents’ medium and long-term loans increased by 46.3 billion yuan year-on-year, which deviated from the weak real estate sales in June and exceeded market expectations. There are two main factors behind the judgment that the increase of residents’ medium and long-term loans exceeds expectations: the early repayment of loans eased in June, and the year-on-year decline of medium and long-term loans supporting residents’ consumption narrowed or even increased year-on-year (medium and long-term consumer loans were mainly mortgages); Banks have increased the supply of medium and long-term loans in residential business to fill the mortgage gap. Since January 2023, medium and long-term loans in residential business have continued to increase year-on-year.

　　"The downward trend of loan interest rate boosted residents’ short-term loans by 63.2 billion yuan year-on-year, which is in line with the current moderate recovery of consumption; In June, when the sales of commercial housing were sluggish year-on-year, the medium-and long-term loans of residents, mainly composed of mortgages, unexpectedly increased by 46.3 billion — — We analyze that this may be related to the reduction in the down payment ratio of home purchases in some areas, and in the context of increasing credit supply, banks concentrated on issuing mortgage loans before the end of June. " Oriental Jincheng pointed out.

　　In terms of social financing, social financing increased by 4.22 trillion yuan in June, a year-on-year decrease of 985.9 billion yuan. Structurally, government bonds were mainly affected by the high base, and the year-on-year increase was less than one trillion yuan.

　　"On the whole, the social financing data in June this year, especially the credit data, exceeded expectations, which made the RMB credit increase more than last year’s high base. Even so, the high base of social financing last year was the result of the high base of credit and the high base of centralized issuance of government bonds. In June this year, the issuance of government bonds was relatively stable, making the overall social financing data nearly 1 trillion yuan lower than that of the same period last year, and the growth rate of social financing scale balance further dropped to 9.0%, a record low. The monthly data can be said to be not bad, but what needs to be vigilant is whether the downward trend of social growth will continue. " CICC pointed out.

　　How to follow-up credit and social financing?

　　In the context of the unexpected credit growth and structural improvement, the market pays special attention to the subsequent credit and social financing trends and policy trends.

　　The macro team of Everbright Securities believes that overall, the remarkable recovery of corporate credit in June indicates that the effect of interest rate cuts has begun to appear. Looking ahead, the year-on-year growth rate of social financing stocks may have bottomed out, and it is expected to rebound rapidly in July-August. On the one hand, the peak of local debt issuance will be ushered in July-August this year. After experiencing a sharp decline in May-June, the growth rate of social financing stocks is expected to stabilize quickly in July-August; On the other hand, after the interest rate cut, a package of steady growth policies is being introduced intensively, which continues to promote the improvement of credit willingness of enterprises and residents.

　　The fixed income team of Huatai Securities pointed out that the financial data in June should be treated rationally. On the one hand, the unexpected credit has seasonal disturbances such as the end of the season, and the sustainability of residential mortgage loan repair needs to be observed and there are doubts. On the other hand, the current economy as a whole is still in a weak recovery path, the consumption cycle continues to improve, and infrastructure investment such as water conservancy and electric power in the first half of the year is also remarkable. From this point of view, the market’s previous expectations for credit growth may be low. In the first half of the year, credit increased by 2.02 trillion yuan year-on-year, basically completing the annual task. In the second half of the year, government bonds entered a low base, and the growth rate of social financing also had some support. It is expected that the general tone of the central bank’s credit policy is still "moderate total amount and steady pace", credit growth is more determined by market-oriented mechanism, and credit line management may continue to weaken. In the third and fourth quarters, the probability of credit social integration will increase year-on-year, but the magnitude is not expected to be large.

　　Dongfang Jincheng predicted that under the prospect that the price level is expected to remain at a moderate level in the second half of the year, if it is necessary to further strengthen the policy of steady growth, there will be some room for interest rate cuts and RRR cuts. Focusing on creating a favorable monetary and financial environment for economic recovery, it is expected that financial data will continue to run at a high level in the third quarter. To this end, the regulatory authorities will supplement the medium and long-term liquidity of the banking system in a timely manner and support banks to increase credit supply through timely RRR reduction and continuous increase in MLF. In addition, the financing cost of the real economy will continue to decline steadily in the third quarter. In addition, the support of monetary policy for the real estate industry will be further increased in the second half of the year. On the basis of continuing to implement the special loan support plan for Baojiaolou, the possibility of increasing the quota in the third quarter or even launching new targeted support tools will not be ruled out. The overall goal is to effectively guide the residents’ mortgage interest rate to decline rapidly, and then drive the real estate industry to achieve a soft landing as soon as possible.