Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - In January 2026, personal deposits in financial institutions decreased by 3.37 trillion yuan year-on-year, while corporate deposits increased by 2.80 trillion yuan, government deposits increased by 1.79 trillion yuan, and non-bank deposits increased by 2.84 trillion yuan, indicating a trend of deposit migration [12][13] - The net financing of government bonds under the social financing (社融) measure increased by 0.28 trillion yuan year-on-year, but the larger increase in government deposits suggests a potential slowdown in fiscal spending [12] - The overall expansion of bank assets and liabilities is supported by the recovery of interbank asset-liability chains, but the decrease in medium- and long-term loans indicates that the real estate sector still needs to recover [19] Summary by Sections Liabilities - In January 2026, personal deposits saw a significant year-on-year decrease, confirming the trend of deposit migration, while corporate and non-bank deposits increased by a total of 5.63 trillion yuan, which is much larger than the decrease in personal deposits [12][13] - Large banks experienced a greater increase in non-bank deposits compared to small banks, indicating that some deposits from small banks may have migrated to large banks due to stronger custody services [13] - The "other" category in the funding sources of the credit balance sheet decreased by 2.39 trillion yuan year-on-year, likely due to increased interbank certificates of deposit and bank repurchase lending [12] Assets - Personal loans increased year-on-year, primarily driven by short-term loans and medium- to long-term operating loans, while medium- to long-term consumer loans decreased by 0.16 trillion yuan, possibly due to the sluggish recovery in real estate sales [17] - Corporate loans decreased year-on-year, mainly due to a reduction in bill financing by 0.36 trillion yuan, although short-term corporate loans increased by 0.34 trillion yuan [17] - Investment in debt and equity increased by 0.37 trillion yuan year-on-year, aligning with trends of fiscal expansion and non-bank balance sheet growth [17] Overall Analysis - The January 2026 data indicates a significant increase in fiscal financing and a recovery in interbank asset-liability chains, which temporarily supports the expansion of bank assets and liabilities [19] - However, the decrease in medium- and long-term loans suggests ongoing challenges in the real estate sector, and the support from non-bank sectors for bank asset-liability expansion may weaken as high-interest deposits mature [19]

Group 1: Report Industry Investment Rating - Not mentioned in the provided content Group 2: Core Viewpoints of the Report - The research starts with how bank behavior affects M2, aiming to connect monetary policy and bank behavior through reconstructing the credit balance sheet to understand bank behavior and the transmission path of monetary policy [3][29][32] - Reconstructing the credit balance sheet can more comprehensively reflect bank behavior and the orientation of monetary policy, and help investors analyze bank behavior [4][5][136] - The change in bank net lending and non - bank holding of certificates of deposit has a significant impact on M2 growth, and the central bank's regulation of bank liquidity is crucial for achieving the M2 target [9][160][172] - The scale of bank bond investment is mainly determined by government bond supply, and the difference between bank bond purchases and supply can reflect the bank's active allocation willingness and affect the market trend [10][173] Group 3: Summary According to the Table of Contents 1. Introduction - Starting the Research from How Bank Behavior Affects M2 - Bank behavior analysis is important for understanding the bond market and monetary policy. The central bank affects bank behavior through liquidity regulation to achieve monetary policy goals [20][24][29] - The monthly credit balance sheet provides information on the bank's capital sources and uses, and the research starts with how bank behavior affects M2, but the change in M2 is often dominated by other items [25][28][29] 2. Different Levels of the Credit Balance Sheet and Their Underlying Arithmetic Relationships 2.1 Institutions Covered by the Credit Balance Sheet - The credit balance statistics involve banking financial institutions, divided into deposit - taking and non - deposit - taking financial institutions. There are three levels of credit balance sheets with different statistical scopes [33][35][36] 2.2 Classification Criteria for Deposits and Loans in Each Level of the Credit Balance Sheet - There are differences in the deposit and loan items of different levels of credit balance sheets. The total deposits and loans of large and small banks are different from those of deposit - taking financial institutions and financial institutions, mainly due to the different scope of institutions included [47][48][54] 2.3 Arithmetic Relationships in Financial Investments of Each Level of the Credit Balance Sheet - Items such as repurchase, reverse repurchase, and inter - bank transactions are aggregated into the "other" item in the deposit - taking institution's statement after netting [71] - The bond investment and financial bond items of large and small banks are netted and included in the deposit - taking institution's statement [73] - Transactions between large/small banks and the central bank are netted out in the deposit - taking institution's statement [76] 3. Verifying the Connotations of Each Item in the Credit Balance Sheet with Micro - data 3.1 The Bond Investment Item Mainly Includes Government Bonds, Local Bonds, and Credit Bonds Held by Deposit - taking Institutions - The bond investment item in the deposit - taking institution's credit balance sheet mainly includes government bonds, local bonds, and credit bonds, and the data is verified by custody data [83][86] 3.2 Financial Bonds - Non - bank Institutions Hold Policy Financial Bonds and Commercial Bank Bonds - The financial bond item in the credit balance sheet mainly reflects non - bank institutions' holdings of financial bonds, and the data is verified by comparing with non - bank institutions' custody data [90] 3.3 The Netting of Financial Inter - bank Transactions Mainly Includes Non - bank Institutions' Holdings of Certificates of Deposit - The netting of inter - bank transactions mainly reflects non - bank institutions' holdings of certificates of deposit, which can reduce the bank's dependence on deposits and affect M2 [97][100][102] 3.4 The Netting of Repurchase and Reverse Repurchase is Mainly the Difference between Bank Net Lending and the Central Bank's Pledged and Outright Repurchase Balances - The netting of repurchase and reverse repurchase is equivalent to the bank's net lending to non - bank institutions after deducting central bank financing, which can affect M2 [107][117][119] 3.5 Replacing the Relevant Items in the Credit Balance Sheet with the Foreign Net Assets Item in the Deposit - taking Company Overview - The foreign - related items in the credit balance sheet mainly reflect the central bank's foreign assets and liabilities, and the foreign net assets item in the deposit - taking company overview is used to replace them [124] 3.6 The Equity and Other Investment Item Mainly Includes Non - standard and Inter - bank Investments - The equity and other investment item includes non - standard investments and inter - bank assets such as funds, and its scale has changed due to regulatory policies [131] 4. Reconstructing the Credit Balance Sheet - Connecting Monetary Policy and Bank Behavior 4.1 Observing the Reasons for M2 Changes from the Deposit Structure - Analyzing the deposit structure can find that different types of deposits have different impacts on M2, and the so - called "deposit transfer" is a false proposition at the bank system level [137][141][142] 4.2 Inferring M2 Changes from the Perspective of Capital Use - Reconstructing the credit balance sheet by adding some items from large and small banks can more accurately analyze the reasons for M2 changes [149][150][155] - The recent improvement in M2 growth is mainly due to the increase in bank net lending, while the impact of foreign net assets is relatively small [160][161] - The reconstructed credit balance sheet reflects the transmission path of monetary policy, and financial investment - related items can be important tools for the central bank to adjust M2 growth [168][172] - By analyzing the credit balance sheets of large and small banks, the reasons for the changes in their deposit structures can be inferred, and the central bank's policy attitude affects bank behavior [181][183][192]