Deposit Trends - In July, household deposits decreased by 1100 billion (1.1 trillion) RMB, a year-on-year increase of 780 billion (0.78 trillion) RMB [1][2] - Corporate deposits decreased by 1500 billion (1.5 trillion) RMB in July, a year-on-year decrease of 320.9 billion RMB [1] - Non-bank deposits increased by 2100 billion (2.1 trillion) RMB in July, a year-on-year increase of 1400 billion (1.4 trillion) RMB [1][2] - Government deposits increased by 861.7 billion RMB in July, a year-on-year increase of 358.2 billion RMB [1] - The shift of deposits from residents to non-bank institutions is evident [1][2] Market Implications - Historically, a surge in non-bank deposits often reflects a trend of residents moving savings into the stock market [1] - Increased non-bank deposits are associated with residents directly entering the market via bank-securities transfers and indirectly via investments in equity funds and wealth management products [1][2] - Historically, significant year-on-year increases in non-bank deposits have corresponded with surges in new account openings and rising margin loan balances, often accompanied by positive stock market performance [1] Monetary Environment - The growth of social financing (TSF) in July was supported by government bonds, with the rolling year-on-year growth rate of new TSF continuing to rise [2] - The structure of social financing is relatively weak, with slight declines in short-term and medium-to-long-term loans to both residents and enterprises, indicating relatively sluggish demand for real economy credit [2] - With limited economic activity, resident deposits continue to be activated, with M1 growth continuing to rise in July while the M2-M1 spread continues to narrow [2] - As deposit rates continue to fall this year, coupled with continued improvement in stock market profitability, resident deposits are gradually flowing into the capital market to seek higher returns, and resident investment behavior is showing a gradual trend of becoming more active [2]

Group 1 - The core viewpoint of the report indicates that the bond market is currently dominated by risk appetite, leading to a steepening adjustment in yields. This is primarily influenced by the performance of risk assets such as equities and commodities, which have shown a trend of upward movement [3][8][16] - The report highlights four specific scenarios that contribute to the current dominance of risk appetite in the bond market: 1) A trend in risk assets like equities and commodities; 2) A lack of clear direction from policy statements; 3) Interest rates being at historical lows, reducing attractiveness; 4) External market influences affecting sentiment [3][16][21] - The report suggests that if the influence of these factors diminishes, the market will eventually revert to being driven by fundamentals and liquidity conditions. Key indicators to watch include the operational space of monetary policy in the second half of the year and whether social financing (社融) shows signs of a turning point [3][16] Group 2 - The report notes that while there is an increasing expectation of "absence of total easing" in the short term, the core tone of monetary policy remains one of "moderate easing" and "maintaining ample liquidity," indicating that policy space has not been closed off [5][20] - It emphasizes that the urgency for total easing in the third quarter has decreased, with a shift in focus towards structural policies and stabilizing prices. However, the possibility of total policy re-engagement in the fourth quarter remains, especially if the fundamentals come under pressure [5][20] - The report also points out that the current market's expectations for monetary easing are relatively low, suggesting that the likelihood of a significant market adjustment similar to earlier in the year is reduced [5][20][21] Group 3 - The report indicates that the short-term market is influenced by insufficient release of risk appetite and institutional sentiment, leading to weaker performance. However, it cautions against overemphasizing concerns about an upward turning point in interest rates [6][33] - It highlights that the growth rate of social financing is likely to peak in the fourth quarter, and price increases may be a result of financing expansion rather than a sign of a new cycle [6][33] - The report concludes that while the market's expectations for monetary easing are low, the actual probability of easing remains significant, suggesting that interest rates may form a mid-term top after the current pullback [6][33]

Core Viewpoint - The report from China Galaxy Securities indicates that government bonds continue to support social financing growth, while credit demand remains weak. Opportunities for retail credit growth may arise from the implementation of personal consumption loans and business loan interest subsidies [1]. Group 1: Social Financing and Government Bonds - In July, new social financing amounted to 1.16 trillion yuan, an increase of 386.4 billion yuan year-on-year; as of the end of July, the stock of social financing grew by 9% year-on-year, with a month-on-month increase of approximately 0.1 percentage points [1]. - The issuance of new government bonds reached 1.24 trillion yuan in July, a year-on-year increase of 555.9 billion yuan, supporting the continued rise in social financing growth [2]. - The total issuance of government bonds in July was 2.44 trillion yuan, which is 732.8 billion yuan more than the same period last year [2]. Group 2: Credit Demand and Loan Trends - As of the end of July, the balance of RMB loans from financial institutions grew by 6.9% year-on-year, a decrease of 0.2 percentage points from the previous month; in July alone, RMB loans decreased by 50 billion yuan, a year-on-year decrease of 310 billion yuan [3]. - Resident loans decreased by 489.3 billion yuan in July, with short-term loans down by 382.7 billion yuan and medium to long-term loans down by 110 billion yuan, primarily due to weak real estate sales and early repayments [3]. - Corporate loans increased by 60 billion yuan, but short-term loans decreased by 550 billion yuan, reflecting ongoing challenges in demand and debt management [3]. Group 3: Monetary Supply and Deposits - The growth rates of M1 and M2 in July were 5.6% and 8.8% year-on-year, respectively, with month-on-month increases of 1 percentage point and 0.5 percentage points [4]. - By the end of July, RMB deposits in financial institutions increased by 8.7% year-on-year, with a month-on-month increase of 0.4 percentage points; in July alone, deposits increased by 500 billion yuan, a year-on-year increase of 1.3 trillion yuan [4]. - Non-bank deposits surged by 2.14 trillion yuan year-on-year, reflecting a significant shift in deposits due to active capital markets, with the Shanghai Composite Index rising by 3.74% [4].

Report Industry Investment Rating No information provided in the given text. Core Viewpoints - In July, the social financing scale showed a seasonal decline after the cross - quarter period, with an increment of 1.16 trillion yuan, an increase of 38.93 billion yuan year - on - year but a significant drop from the previous month. The net financing of government bonds was 1.24 trillion yuan, an increase of 55.9 billion yuan year - on - year, strongly supporting the social financing. Credit financing shrank significantly, with a decrease of 426.3 billion yuan in the month and an additional decrease of 345.5 billion yuan year - on - year. Off - balance - sheet non - standard financing decreased by 166.6 billion yuan, and direct financing was not enough to make up for the traditional financing gap [1][7]. - In July, M1 growth continued to rise, with a year - on - year increase of 5.6%, 1.0 percentage point faster than the previous month, reaching a 29 - month high, mainly due to the low - base effect, improvement of enterprise cash flow, and the conversion of deposits to investments. M2 increased by 8.8% year - on - year, with a 0.5 - percentage - point increase from the previous month. Although the M2 - M1 gap narrowed, the (M2 - M1)/M1 indicator was still at a high level [1][12]. - The new RMB loans were unexpectedly - 5 billion yuan, an additional decrease of 31 billion yuan year - on - year, the first single - month negative growth since August 2005, indicating weak real - economy financing demand. The enterprise - side financing structure deteriorated slightly, and the household - side long - and short - term loans both shrank. On August 13, the implementation plan for the fiscal discount policy for personal consumption loans was released to relieve the pressure on the household side [2][17]. Summaries According to Related Catalogs 7 - Month Social Financing Seasonal Decline - Social financing scale: In July, the social financing scale increment was 1.16 trillion yuan, an increase of 38.93 billion yuan year - on - year but a significant decline from the previous month. It mainly relied on the net financing of government bonds (1.24 trillion yuan, an increase of 55.9 billion yuan year - on - year). Credit financing decreased by 426.3 billion yuan in the month, an additional decrease of 345.5 billion yuan year - on - year. Off - balance - sheet non - standard financing decreased by 166.6 billion yuan, and direct financing was not sufficient to fill the traditional financing gap [1][7]. - M1 and M2: M1 growth continued to rise, with a year - on - year increase of 5.6%, 1.0 percentage point faster than the previous month, reaching a 29 - month high. M2 increased by 8.8% year - on - year, with a 0.5 - percentage - point increase from the previous month. The M2 - M1 gap narrowed to 3.2% (previous value 3.7%), but the (M2 - M1)/M1 indicator was still at a high level [1][12]. - New RMB loans: The new RMB loans were - 5 billion yuan, an additional decrease of 31 billion yuan year - on - year, the first single - month negative growth since August 2005. The enterprise - side financing structure deteriorated slightly, and the household - side long - and short - term loans both shrank. The government released a policy to relieve the pressure on the household side [2][17].

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].