New loans exceeded 9 trillion in the first quarter, and interest rates remained at historically low levels
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In the first quarter, RMB loans increased by 9.46 trillion yuan, which was at a high level in the same period in history; the stock of social financing was 390.32 trillion yuan, a year-on-year increase of 8.7%; the balance of broad money (M2) was 304.8 trillion yuan, a year-on-year increase of 8.3%… The latest data from the People’s Bank of China shows that financial support entities were of sufficient quality in the first quarter.
Authoritative experts believe that overall, the scale of social financing and loan issuance in the first quarter were basically in line with market expectations, effectively meeting the reasonable financing needs of the real economy and adapting to the current economic growth. Although loan growth has slowed down, the quality and efficiency of financial services to the real economy have significantly improved.
In the first quarter of this year, the total amount of loans grew steadily and was distributed in a balanced manner. At the end of March, the balance of RMB loans was 247.05 trillion yuan, a year-on-year increase of 9.6%, 0.5 percentage points lower than the previous month.
“New RMB loans in the first quarter were 9.46 trillion yuan, more than 1 trillion yuan more than the same period in 2022, which is at a high level in the same period in history.” Authoritative experts said that banks had a “good start” in the first quarter of last year and had a higher increase, which is expected to be higher in the future. Three quarters caused a certain overdraft. Since the second half of 2023, the People’s Bank of China has focused on guiding financial institutions to strengthen balanced credit extension, avoid idling funds, and leave stamina to sustainably support the real economy.
Behind the year-on-year decrease in new loans is the change in the pace of credit extension. In 2023, bank credit will generally be deployed at the forefront, with 50% of the full year’s credit already allocated in the first quarter. But this year, banks are paying more attention to “a balanced rhythm of credit lending” and pursuing “stable quantity and high quality.” Lin Shu, general manager of the Planning and Finance Department of Industrial Bank, said that Industrial Bank has increased its asset investment and has arranged a loan quota of 500 billion yuan this year, and 40% will be completed in the first quarter.
“In the first quarter of this year, the proportion of bank credit extension to new credit throughout the year has generally converged significantly compared with the same period last year.” Lian Ping, chairman of the China Chief Economist Forum, pointed out that this year the People’s Bank of China requires a more balanced credit extension, which is actually a change from the previous period. Loans that were excessively high in the quarter were extended to subsequent months to provide stable and balanced credit support for the real economy.
While credit growth is more rational, the credit structure continues to be optimized in the first quarter. Data show that in the first quarter, loans to enterprises (and institutions) increased by 7.77 trillion yuan, accounting for more than 80% of all new loans. At the end of March, the growth rates of green loans, inclusive small and micro loans, and manufacturing medium and long-term loans all remained at a high level of 20%-30%.
The growth rate of private enterprise loans continues to be faster than the growth rate of all loans. Currently, more than 90% of the scientific and technological innovation enterprises that have received loan support are private enterprises.
Since the beginning of this year, the People’s Bank of China has accelerated the layout of the “Five Big Articles”. The new PSL quota of 500 billion yuan has been fully released. Loan identification standards.
Many people in the banking industry also said that in serving the real economy, this year we will pay special attention to actively investing financial resources to help the transformation and upgrading of traditional industries, and by supporting the innovative development of advanced manufacturing, we will help form new productive forces and promote high-quality development of the real economy.
Lu Jingen, business director of China CITIC Bank, revealed that judging from the loan structure in the first quarter, CITIC Bank’s reserve projects focus on key areas such as green credit, strategic emerging industries, scientific and technological enterprises, and manufacturing, accounting for more than 70%.
In addition, loan interest rates continue to hit record lows, providing “real money” support to the real economy. During the year, the People’s Bank of China lowered the reserve requirement ratio by 0.5 percentage points and guided the loan prime rate (LPR) for loans with maturities of more than 5 years to fall by 0.25 percentage points, driving loan interest rates further downward.
The latest data shows that the weighted average interest rate of new corporate loans in March was 3.75%, 22 basis points lower than the same period last year. The interest rate of new personal housing loans was 3.71%, 46 basis points lower than the same period last year, both at historical lows.
“The financing costs of the entire society have shown a steady but declining trend, and the cost of loans to various business entities has been reduced in an orderly manner, which has effectively boosted market confidence and stabilized expectations.” said Dong Ximiao, chief researcher of China Merchants Union.
Looking forward to the subsequent credit extension, Wen Bin, chief economist of China Minsheng Bank, predicts that in addition to stabilizing the total amount, smoothing the pace of credit and adjusting and optimizing the structure will be the focus of the next step. In the process of supporting the transformation and upgrading of traditional industries and the cultivation and growth of new productive forces, financial institutions will also actively explore credit needs, scientifically formulate credit arrangements throughout the year, revitalize existing financial resources, and at the same time support the accelerated development of direct financing and maintain the balance of currency, credit and The total amount of financing has grown reasonably, and it is expected that financial support for the real economy will be more sustainable this year.
The reporter learned that in the next step, the People’s Bank of China will also use a variety of tools to provide liquidity to ensure the smooth issuance of government bonds. The market expects that the second quarter may usher in a period of intensive issuance of government bonds, and the issuance of special government bonds may also start. The People’s Bank of China will flexibly grasp the operational intensity of policy tools such as reverse repos in the open market, accurately hedge the short-term impact of fiscal debt issuance factors, and maintain the smooth operation of market interest rates.
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