Core Insights - The financial data for July 2025 indicates a stable social financing (社融) environment but weak credit performance, suggesting a potential recovery in credit demand due to upcoming policy effects such as long-term special government bonds and consumer loan interest subsidies [2][10] Group 1: Social Financing and Credit Performance - In July, new social financing amounted to 1.16 trillion yuan, which is 389.3 billion yuan more than the same month last year, but below market expectations. The social financing stock's year-on-year growth rate was 9.0%, up 0.1 percentage points from the previous month [3][9] - The structure of social financing showed a decrease in RMB loans by 4.263 billion yuan, with foreign currency loans also declining by 8.6 billion yuan. Non-standard financing decreased by 166.7 billion yuan [3][4] - Direct financing saw significant contributions, with net financing from government bonds at 1.24 trillion yuan, an increase of 555.9 billion yuan year-on-year, and corporate bonds net financing at 279.1 billion yuan, reflecting a positive trend [3][9] Group 2: Loan Structure and Trends - RMB loans from financial institutions decreased by 500 billion yuan, with long-term loans to households down by 120 billion yuan and corporate long-term loans down by 390 billion yuan [4][10] - The short-term financing for enterprises remained stable, with a year-on-year increase in corporate bill financing by 312.5 billion yuan [4][10] Group 3: Monetary Indicators - The M1 money supply growth rate was 5.6%, up 1.0 percentage points from the previous month, while M2 growth improved to 8.8%, an increase of 0.5 percentage points [7][10] - In July, RMB deposits increased by 500 billion yuan, with a notable decrease in household deposits by 1.11 trillion yuan [7][10] Group 4: Future Outlook - The upcoming policies, including the issuance of long-term special government bonds and consumer loan interest subsidies, are expected to stimulate credit demand [10][13] - The bond market is sensitive to liquidity changes due to low bond yields, and the central bank is likely to maintain liquidity support, which could positively influence the bond market's performance [2][10][13]

Investment Rating - The report maintains a "Buy" rating for several companies in the banking sector, indicating an expectation of total returns exceeding the relevant industry over the next 12 months [16]. Core Insights - In July, new RMB loans decreased by 50 billion, a year-on-year reduction of 310 billion, primarily due to weak credit demand during the off-peak season [1][2]. - The total social financing (社融) in July was 1.16 trillion, a year-on-year increase of 389.3 billion, with government bonds being the main source of this financing [1][2]. - M1 growth rate was 5.6% and M2 growth rate was 8.8%, both showing a month-on-month increase [3][4][9]. - Despite a net decrease in new RMB loans in July, social financing still showed a year-on-year increase, indicating continued financial support for the real economy [1]. Summary by Sections New RMB Loans - In July, new RMB loans saw a net decrease of 50 billion, with short-term loans and medium to long-term loans also experiencing declines [2]. - The total new RMB loans for the first seven months of 2025 amounted to 1.287 trillion, reflecting a year-on-year decrease of 660 billion [2]. Social Financing - The new social financing in July was 1.16 trillion, with a significant contribution from government bonds, which amounted to 1.244 trillion, a year-on-year increase of 555.9 billion [1][2]. - For the first seven months of 2025, total social financing reached 23.99 trillion, up 51.2 billion year-on-year [2]. Deposits - New RMB deposits in July were 500 billion, a year-on-year increase of 1.3 trillion, primarily driven by non-bank financial institution deposits [1][2]. - Resident deposits saw a net decrease of 1.11 trillion, while non-bank financial institutions added 2.14 trillion in deposits [1][2]. Economic Support Measures - The report highlights the government's recent initiative to boost consumption through fiscal subsidies for eligible personal consumption loans, which is expected to stimulate demand and promote growth in personal loans [1].

Investment Rating - The industry investment rating is "Positive" [8] Core Viewpoints - The continuous fiscal efforts have driven a year-on-year increase in social financing (社融) by 9% as of the end of July, with a month-on-month improvement of 0.1 percentage points [2][15] - In July, the total social financing increased by 1.16 trillion yuan, a year-on-year increase of 390.1 billion yuan, primarily supported by government bond financing [2][15] - The demand for credit remains weak, with a year-on-year growth rate of 6.9% for RMB loans, reflecting a decrease of 500 billion yuan in July [3][17] Summary by Sections Social Financing - As of the end of July, social financing stock increased by 9% year-on-year, with a month-on-month improvement of 0.1 percentage points [2][15] - The net financing of government bonds reached 1.24 trillion yuan, a year-on-year increase of 555.9 billion yuan, indicating strong fiscal support for the real economy [2][15] - The total social financing added in July was 1.16 trillion yuan, with direct financing performing better than the previous year [2] Credit Demand - The demand for credit is weak, with RMB loans decreasing by 500 billion yuan in July, a year-on-year reduction of 3.1 trillion yuan [3][17] - Corporate credit demand is particularly weak, with the main increase coming from bill financing [3] - Residential loans also saw a significant decrease, with a reduction of 4.893 trillion yuan in July, reflecting a year-on-year decline of 2.793 trillion yuan [3] Monetary Supply - M1 and M2 growth rates increased to 5.6% and 8.8% year-on-year, respectively, with month-on-month improvements of 1 percentage point and 0.5 percentage points [7] - The total RMB deposits increased by 500 billion yuan in July, a year-on-year increase of 1.3 trillion yuan [17] Investment Recommendations - The report maintains a positive outlook on the banking sector, highlighting the stable performance of banks amid ongoing fiscal support and a favorable liquidity environment [8] - It suggests focusing on banks with historical risk clearance, low valuations, and those that are significantly underweighted by active funds [8]

Core Viewpoint - China Galaxy issued a report on the banking industry on August 14, recommending a buy rating for banks based on several key factors [1] Group 1: Financial Indicators - Social financing continues to show a year-on-year increase [1] - RMB loans have turned to negative growth, with government bonds contributing significantly to the increase in social financing [1] - M1 and M2 growth rates continue to rise, with a substantial increase in non-bank deposits [1] Group 2: Credit Demand - Seasonal weakness in credit is noted, with both household and corporate loan demand still needing recovery [1]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The "relocated" deposits remain as deposits and do not reduce the allocation power in the bond market. Even if residents' deposits move to the stock market, they still exist in the form of margin deposits, so the overall bank deposits do not decrease, and the asset - side allocation power will not decline [1]. - Credit showed negative growth and relied on bills, indicating weak financing demand. Both corporate and household credit demand was weak in July, with high - frequency data showing a weakening in real - estate sales [2][9]. - Government bonds are still the main support for social financing. However, if there is no new fiscal budget, government bond supply may decrease year - on - year in the future, and social financing may face pressure again [3][4][14]. - The base effect pushed up the M1 growth rate, and non - bank deposits drove the M2 growth rate to rebound. As the government bond issuance pace slows down, fiscal deposits may decrease year - on - year, increasing market liquidity [5][20]. - The bond market may experience short - term or periodic fluctuations and is waiting for a breakthrough. As the commodity and stock markets cool down, the bond market is expected to oscillate in the short term, and interest rates may break through downward as the fundamentals change and the asset shortage evolves, more likely around or in the fourth quarter [6][23]. 3. Summary by Relevant Contents Credit Situation - In July, new credit was - 500 billion yuan, a year - on - year decrease of 310 billion yuan. Corporate long - term loans decreased year - on - year, short - term loans were flat compared with the previous year, and bill financing increased year - on - year. Household new long - term and short - term loans both decreased year - on - year, and high - frequency data showed weak real - estate sales and household credit demand [2][9]. Social Financing Situation - In July, new social financing was 1.16 trillion yuan, a year - on - year increase of 389.3 billion yuan, with a year - on - year growth rate of 9.0%. Government bonds were the main support, with an increase of 555.9 billion yuan year - on - year to 1.244 trillion yuan. Non - government bond social financing growth was weak, and if there is no new budget, government bond supply may decrease year - on - year in the future, putting pressure on social financing growth [3][4][14]. Monetary Supply Situation - In July, the M1 growth rate rebounded from 4.6% to 5.6% mainly due to the base effect, and there was no trend - like increase in the two - year compound growth rate. The M2 growth rate was 8.8%, a 0.5 - percentage - point increase from the previous month, mainly driven by the year - on - year increase in non - bank deposits. As the government bond issuance pace slows down, fiscal deposits may decrease year - on - year, increasing market liquidity [5][17][20]. Bond Market Outlook - The bond market may experience short - term or periodic fluctuations. As the commodity and stock markets cool down, the 10 - year and 30 - year treasury bonds are expected to oscillate in the short term. As the fundamentals change and the asset shortage evolves, interest rates may break through downward, more likely around or in the fourth quarter [6][23].

Investment Rating - The report maintains a "Recommended" rating for the banking sector, indicating a positive outlook for the industry [1]. Core Insights - The report highlights a weak credit demand and a significant increase in non-bank deposits, with July's new social financing reaching 1.16 trillion yuan, a year-on-year increase of 386.4 billion yuan [3]. - The report notes that the growth of M1 and M2 continues to rise, with M1 increasing by 5.6% and M2 by 8.8% year-on-year [3]. - The report emphasizes that government bonds are the main contributors to social financing growth, with new government bonds issued amounting to 1.24 trillion yuan in July, a year-on-year increase of 555.9 billion yuan [3]. - The report anticipates that the implementation of personal consumption loans and business loan interest subsidies will create opportunities for retail credit growth [3]. - The report suggests that the banking sector's fundamentals are accumulating positive factors, indicating a potential turning point in performance [3]. Summary by Sections Credit Demand and Social Financing - In July, the total social financing stock grew by 9% year-on-year, with a month-on-month increase of approximately 0.1 percentage points [3]. - The report indicates that the demand for loans from both households and enterprises remains weak, with a notable decrease in household loans by 4.893 trillion yuan year-on-year [3]. Deposit Trends - Non-bank deposits saw a significant increase of 2.14 trillion yuan year-on-year, attributed to the active capital market [3]. - The report mentions a "deposit migration" phenomenon, where household and corporate deposits decreased significantly, while fiscal deposits increased by 770 billion yuan year-on-year [3]. Investment Recommendations - The report recommends focusing on the effectiveness of a package of policies and upcoming reform measures from the 20th Central Committee's Fourth Plenary Session and the 15th Five-Year Plan [3]. - Specific stock recommendations include Industrial and Commercial Bank of China (601398), Agricultural Bank of China (601288), Postal Savings Bank of China (601658), Jiangsu Bank (600919), and Hangzhou Bank (600926) [3].

Group 1: Report Overview - Report title: "社融多增与信贷少增？——7月中国金融数据点评20250814" [1] - Report date: August 14, 2025 [2] - Analysts: Yan Ziqi, Hong Ziyan [2] Group 2: Main Views Data Observation - In July, both social financing and credit showed seasonal declines, with a slight negative growth in credit. The new social financing stock scale in July was 1.16 trillion yuan, a year-on-year increase of 0.38 trillion yuan. RMB loans decreased by 0.05 trillion yuan, a year-on-year decrease of 310 billion yuan [2]. - In terms of money supply, the growth rates of M2 and M1 both increased, with a more significant increase in M1, while the growth rate of M0 slowed down slightly. M2 increased by 8.8% year-on-year, up 0.5 pct from the previous month. M1 increased by 5.6% year-on-year, up 1.0 pct from the previous month, showing a significant marginal increase. M0 increased by 11.8% year-on-year, down 0.2 pct from the previous month [2]. Reasons for Social Financing Growth - The seasonal decline in social financing growth in July was still stronger than in previous years, and the increase in government bond issuance remained the core driving force. Due to the faster issuance of government bonds this year, July was still a peak period for government bond supply. Meanwhile, the negative growth of the monthly credit scale this month was lower than in previous years, leading to a further increase in the proportion of government bond issuance in the new social financing this month [3]. Reasons for Credit Shortfall - The new credit in July showed a seasonal decline, and the credit shortfall might be due to seasonal patterns. July is usually a month with the smallest credit increment in a year. Looking back at credit - weak months such as February, April, and May this year, their performance was weaker than in previous years. Therefore, the credit increment in July also continued this trend, reaching the lowest level in recent years. However, according to seasonal patterns, there is still room for recovery next month [4]. - From the supply side, banks' willingness to lend may have shrunk, as the BCI corporate financing environment index dropped to 46.09% (49.12% last month), a significant decline. From the demand side, the PMI index in July dropped to 49.3%, with the new order index shrinking to 49.4% and the procurement index shrinking to 49.5%. Both production demand and procurement willingness were weak, and corporate business expectations were under pressure. In addition, the PMI of small enterprises showed a large decline for two consecutive months, and the industry faced corporate clearance pressure [4]. M2 and M1 Trends - M2 and M1 continued to grow, indicating an abundant total amount of market funds. Since September 2024, M1 has shown an upward trend in the range, and the M2 - M1 gap has been continuously narrowing. In July, M1 continued its rapid upward trend, reaching 5.6% year - on - year, the highest value since March 2023. On the one hand, July is a large month for local government debt financing, and the central bank conducted 1.4 trillion yuan in outright reverse repurchases to guide a loose capital environment. On the other hand, the popularity of the equity market and commodity market continued, facilitating the activation of money in the investment field [5]. Highlights in July Financial Data - In terms of fiscal deposits, the government bond financing volume was higher than in previous years, and the new fiscal deposits were at a relatively high historical level. The difference between the new government bond financing volume and the new fiscal deposits decreased compared with the previous month but was higher than the seasonal level, indicating that the transmission speed of funds from the government sector to the real economy was still faster than in the same period of previous years [6]. - In terms of corporate direct financing by industry, the bond financing of real - sector enterprises increased year - on - year, with significant year - on - year increases in net financing in the energy, optional consumption, and healthcare sectors. Financial financing decreased slightly year - on - year, and real estate net financing showed signs of recovery. Large enterprises with the ability to finance from the bond market still had good net financing performance this month [7][8]. - In terms of bill financing, bill financing took the lead in the new credit in July, showing an obvious shift from short - term loan volume - boosting to bill volume - boosting by banks. Due to the increased corporate operation risks this month, banks, under the pressure of assessment, chose bill financing again to increase the total credit scale, leading to a significant decline in bill interest rates on July 28. In other credit sub - items, both short - term and long - term corporate loans declined significantly, and the suppressed financing demand was transformed into a significant increase in bill financing, and the corporate financing structure developed in a non - benign direction [8]. Future Outlook - In the current economic situation, with the continuous acceleration of government leverage, the money side continues to be activated, but there are still concerns about corporate balance sheets. In terms of money circulation, the M2 - M1 gap continued to narrow, and M1 continued its upward trend, indicating significant capital activation. The year - on - year growth of the total assets and total liabilities of industrial enterprises above the designated size began to recover, and the balance - sheet expansion momentum was restored. However, the equity growth rate was lower than the asset growth rate, reflecting insufficient internal accumulation, and the balance - sheet expansion relied on debt rather than profit support. There is also a contradictory problem of "increased social financing" but "credit contraction" at the corporate level [8]. - The policy is guiding the economy from "over - capacity" to "industry clearance." Recently, multiple measures have been accelerating the clearance of inefficient enterprises, and further standardizing corporate operations through new regulations on social security contributions and housing rent taxes. During this process, the economy may face structural adjustments, and the economic fundamentals may show increased volatility [9]. - Fiscal and monetary policies are coordinated to further strengthen credit supply. On the household side, a consumer loan interest subsidy policy has been introduced, showing the intention to support household leverage. On the corporate side, an operating entity loan interest subsidy policy has been introduced, showing the intention to support small enterprises relying on bank financing and reflecting the principle of "helping in an emergency rather than rescuing the poor." From the perspective of the leverage chain of "government - driven → enterprise - taking - over → household - following," in the second half of the year, the government's leverage - increasing is coming to an end, and it is a critical turning point for enterprises and households to take over. The loose attitude of the monetary side may continue, and the loose financing environment may still be guaranteed [9]. - Regarding interest rate cuts, a dialectical view is needed. Although the recent interest subsidy policies have led to speculation in the market about a lower probability of future interest rate cuts, the weak US non - farm payroll data and the reduced inflation risk have increased the expectation of a Fed interest rate cut in September, providing policy space for China's interest rate cut. There is still a possibility of interest rate cuts both at home and abroad in the second half of the year [9]. - From the perspective of banks' reluctance to lend, the central bank may further guide a loose capital environment to promote the flow of funds to the real economy. To cooperate with government bond issuance, the central bank may still use various tools such as outright reverse repurchases, increased reverse repurchase issuance, restarting treasury bond purchases, and MLF over - renewal to ensure the liquidity of the banking system [10]. - For the bond market, there may still be twists and turns in the process of the fundamentals moving from "capacity clearance" to "demand recovery," which will bring about long - and short - term differences in the market. The volatility of the bond market is expected to increase. It is recommended to pay attention to changes in market sentiment to seize trading opportunities brought about by increased volatility [10][12]

Group 1: Financial Data Overview - In July 2025, new social financing (社融) amounted to 1.16 trillion yuan, a decrease from 4.20 trillion yuan in the previous month, and 3,893 billion yuan higher year-on-year[1] - The year-on-year growth rate of social financing stock was 9.0%, up from 8.9% in the previous month[1] - RMB loans decreased by 50 billion yuan, compared to an increase of 224 billion yuan in the previous month[1] Group 2: Credit and Loan Analysis - Financial institutions reported a decrease of 50 billion yuan in RMB loans, which is 310 billion yuan lower year-on-year[4] - Long-term loans to households decreased by 120 billion yuan year-on-year, while short-term loans saw a reduction of 167.1 billion yuan[4] - Corporate long-term loans decreased by 390 billion yuan year-on-year, while short-term financing remained stable[4] Group 3: Market Trends and Outlook - The bond market is sensitive to changes in market liquidity due to low bond yields, with the 10-year government bond yield rising to 1.73%[14] - The government bond net financing in July was 1.24 trillion yuan, a year-on-year increase of 5,559 billion yuan, indicating a strong contribution to social financing[3] - Future credit demand is expected to improve with the release of policies such as long-term special government bonds and consumer loan interest subsidies[15]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - In July 2025, new RMB loans decreased by 50 billion yuan, with a year - on - year decrease of 310 billion yuan, and the credit balance growth rate dropped to 6.9%. New social financing scale reached 1.16 trillion yuan, with a year - on - year increase of 389.2 billion yuan, and the stock growth rate of social financing rose from 8.9% to 9%. The year - on - year growth rate of M2 increased from 8.3% to 8.8%, and the growth rate of the new - caliber M1 increased from 4.6% to 5.6%. Overall, July's credit performance was lower than market expectations, with bills being the main support. Among social financing sub - items, government bonds increased by 555.9 billion yuan year - on - year, supporting the social financing growth rate to remain high. In terms of deposits, under the low - base effect, the M1 growth rate continued to rise, and M2 was mainly driven by non - bank deposits [5][8]. 3. Summary by Related Catalogs 3.1 Credit: Both the household and corporate sectors performed mediocrely - **Household Sector**: In July, both short - term and medium - to - long - term loans were relatively weak, with a combined decrease of 489.3 billion yuan. Short - term loans decreased by 382.7 billion yuan, 167.1 billion yuan less than the same period last year, possibly due to the overdraft effect of the June shopping festival. Medium - to - long - term credit decreased by 110 billion yuan, 120 billion yuan less than the same period last year. The year - on - year growth rate of the trading area of commercial housing in 30 large - and medium - sized cities was - 18.6%, and the decline was larger than last month. The trading of second - hand houses was relatively weak, and medium - to - long - term household loans showed negative growth again since April [2][10]. - **Corporate Sector**: In July, corporate medium - to - long - term loans decreased by 260 billion yuan, 390 billion yuan more than the same period last year. The growth rate of the loan balance dropped slightly to 6.9%. Existing policy tools had limited driving effects on corporate loans, and subsequent policy - based financial tools might support corporate medium - to - long - term loans. Corporate short - term loans decreased by 550 billion yuan, basically the same as last year. Bill financing increased by 871.1 billion yuan, 312.5 billion yuan more than the same period last year. With the weak loan issuance, the demand for bills to "fill the gap" increased significantly [2][15][16]. 3.2 Social Financing: Government bonds still provided support, and the willingness to issue corporate bonds continued - **Government Bonds**: In July, the issuance scale of government bonds was large, with a new increase of 1.24 trillion yuan, 555.9 billion yuan more than the same period last year. According to the current issuance plan, government bonds would still support social financing in July, but from August to the end of the year, they might see a year - on - year decrease. If no additional bonds were issued at the end of the year, the peak of the annual social financing growth rate might appear in July [3][17]. - **Corporate Bonds**: In July, the willingness to issue corporate bonds was still strong, with a new increase of 27.91 billion yuan, 7.55 billion yuan more than the same period last year. With relatively low bond yields, the willingness to issue bonds increased seasonally, which might also "siphon" corporate loans. Un - discounted bills decreased by 16.39 billion yuan, close to the same period last year, and off - balance - sheet bills continued to be transferred to on - balance - sheet [3][21]. 3.3 Deposits: The growth rates of M1 and M2 continued to rise - **M1**: In July, the new - caliber M1 decreased by 2.9 trillion yuan, 832.4 billion yuan more than the same period in 2024, which was at a relatively high seasonal level. The wealth effect of the equity market supported the activation of funds to some extent, and the year - on - year reading of M1 increased significantly from 4.6% to 5.6%. - **M2**: Among the sub - items of M2, non - bank deposits were the main support. Driven by the recovery of the equity market, non - bank deposits increased by 2.14 trillion yuan in July, 1.39 trillion yuan more than the same period in 2024. After the cross - quarter in July, corporate deposits showed an outflow state, decreasing by 1.46 trillion yuan, but due to the low - base effect of the general deposit outflow after manual interest compensation in 2024, the decrease was 320.9 billion yuan less year - on - year [3][23][30].

Core Viewpoint - July's social financing data indicates that while M1 and M2 growth exceeded market expectations, new loans and social financing fell short, reflecting changes in financing structure, seasonal factors, and shifts in household investment behavior [1][2][3] Monetary Supply - In July, M2 expanded by 8.8% year-on-year, while M1 grew by 5.6%, both surpassing Bloomberg's consensus expectations of 8.3% and 5.2% respectively [1][7] - The year-on-year growth rate of M1 increased from 4.6% in June to 5.6% in July, partly due to low interest rates and the reactivation of deposits by residents and enterprises [7] - M2's year-on-year growth rate rose from 8.3% in May to 8.8% in July, significantly higher than the expected 8.3% [8] Social Financing - July's new social financing amounted to 1.16 trillion yuan, lower than the expected 1.63 trillion yuan, but showed a year-on-year increase of 389.3 billion yuan [6][10] - Government bond net issuance in July was 1.24 trillion yuan, contributing approximately 4.1 percentage points to the year-on-year growth of social financing [2][6] - The net issuance of government bonds in the first seven months of the year reached 8.9 trillion yuan, an increase of 4.9 trillion yuan year-on-year, indicating a proactive fiscal policy [3][4] Loan Dynamics - New RMB loans in July decreased by 500 billion yuan, contrasting with the expected increase of 300 billion yuan, reflecting weak demand from the private sector, particularly in the real estate market [2][4][5] - The total amount of short-term and medium-to-long-term loans for residents fell by 287.1 billion yuan year-on-year, primarily due to weakened demand in the real estate sector [2][4] - Corporate short-term and medium-to-long-term loans decreased by 5.5 billion and 2.6 billion yuan respectively, indicating a decline in financing demand amid rising uncertainties [5][6] Fiscal Policy Impact - The acceleration of social financing growth in July was supported by the front-loaded issuance of government bonds, which is expected to continue influencing the broad credit cycle positively [3][4] - The overall fiscal expenditure growth in the first half of the year was 8.9%, significantly higher than the -2.8% recorded in the same period last year [4] - The sustainability of fiscal stimulus in the latter half of the year may face uncertainties, particularly in light of potential reductions in government bond issuance compared to the previous year [4]