Investment Rating - The report maintains a "Buy" rating for the banking industry, indicating an expected investment return exceeding the market benchmark index by over 15% in the next 6-12 months [1]. Core Insights - The report anticipates a seasonal decline in loan issuance for July, predicting new RMB loans to be less than 100 billion, with a year-on-year decrease of 200 billion, resulting in a growth rate around 7% [4][5]. - Social financing (社融) is expected to remain stable in July, with an estimated increase of 1-1.2 trillion, reflecting a year-on-year increase of approximately 300-500 billion, and a growth rate of around 9% [13]. - The report highlights a seasonal drop in corporate credit demand, with short-term loans expected to show negative growth, while retail loan growth remains weak due to low consumer leverage willingness [6][7]. Summary by Sections Loan Issuance - In June, loan issuance saw a seasonal peak but was constrained by insufficient demand, with a total of 3.1 trillion in new loans for the second quarter, a year-on-year decrease of 670 billion [4]. - The report predicts that July will see a further decline in loan issuance, with corporate loan demand particularly weak due to economic pressures [6]. Social Financing - The report forecasts that government bond issuance will continue to support social financing growth, with a projected increase of 1.25 trillion in government bonds for July, a year-on-year increase of 566.2 billion [14]. - Direct financing through corporate bonds and other instruments is also expected to show marginal recovery, contributing to the overall social financing growth [13]. Monetary Indicators - M1 growth is expected to remain stable around 4.5%, while M2 growth may see a slight decline to approximately 8.1% due to seasonal factors and shifts in deposit patterns [17]. - The report notes a "see-saw" effect between different types of deposits, impacting the overall monetary growth dynamics [17].

Investment Rating - The report maintains a "Buy" rating for the banking industry, indicating an expected investment return exceeding the market benchmark index by over 15% in the next 6-12 months [1]. Core Insights - The report highlights a seasonal recovery in loan issuance in June, driven by a low base effect and increased demand from banks due to performance assessments and year-end evaluations [4][6]. - It predicts that new RMB loans in June will be around 2.3-2.5 trillion, representing a year-on-year increase of 200-400 billion [4][6]. - The report anticipates a stable growth in social financing (社融), with an expected increase of 4-4.2 trillion in June, reflecting a year-on-year rise of 700-900 billion and a growth rate of approximately 8.9% [12][15]. - M1 and M2 growth rates are expected to improve slightly in June due to the low base effect from the previous year, with M1 projected to reach around 3% and M2 expected to exceed 8% [19][20]. Summary by Sections Loan Issuance - In June, the loan issuance is expected to show a seasonal increase, with a projected total of 2.3-2.5 trillion RMB, which is a year-on-year increase of 200-400 billion [4][6]. - The manufacturing PMI for June is forecasted at 49.7%, indicating a slight recovery in production and new orders [4]. Social Financing - The report estimates that social financing will see an increase of 4-4.2 trillion in June, with a growth rate of about 8.9%, supported mainly by government bond issuance [12][15]. - The direct financing segment is expected to remain low, with government bonds contributing significantly to the overall financing growth [12]. Monetary Supply - M1 and M2 growth rates are projected to improve due to the low base effect from last year, with M1 expected to reach around 3% and M2 anticipated to exceed 8% [19][20]. - The report notes that the shift of government deposits to residents and enterprises will further support M2 growth [20]. Credit Demand - The report indicates that corporate loans will continue to be the mainstay, with a seasonal increase in short-term loans expected in June [7]. - Retail credit is also anticipated to grow seasonally, although the improvement in consumer demand remains limited [9]. Interest Rates - The report discusses the trends in discount rates, noting a decrease in rates for various terms in June, with the 1M rate averaging around 0.81% [5][10]. Overall Economic Outlook - The overall economic outlook remains cautious, with the potential for credit growth to face challenges due to insufficient effective demand and regional economic conditions [6][8].