Every bank launching their 2025 New Year's promotion is already in a "silent battle" mode: with insufficient new demands, they prioritize retaining existing customers and cautiously optimistic about the real estate market recovery.

With the release of the third-quarter performance reports, the banking industry has entered the stage of preparing for year-end reserve projects in preparation for a strong start to the new year. Many banking professionals have indicated to Financial Union that they are currently visiting and assessing customer needs to prepare for next year's business initiatives. At the same time, some enterprises have provided feedback indicating continued lack of demand and confidence, in addition to concerns about the uncertain economic environment and industry policies. The latest credit data for October shows continued weak demand. Wang Qing, an analyst at Orient Securities, believes that in October, RMB loans continued to increase significantly less year-on-year, with weak performance in corporate loans causing a significant drag on overall credit. This is largely due to the impact of local government debt, with some existing loans of local government financing platforms being repaid or replaced early. In addition, the stimulating effect of a package of incremental policies on credit issuance still needs to be further demonstrated. Regarding next year's credit situation, on November 19, a business department head of a large joint-stock bank told Financial Union that based on the actual situation of enterprises and the credit requirements of the head office, they will prioritize exploring the needs of long-term cooperative customers for next year's reserve projects, which are considered an important foundation. Secondly, they will select projects that comply with national policy requirements and align with the five major article directions. Additionally, a business director of a branch of a joint-stock bank in Guangzhou stated that based on recent comprehensive information from the head office, next year's operations will focus more on profit assessment. On one hand, this year's profit requirements were lowered due to internal restructuring and industry competition, but they are expected to return next year. On the other hand, in the past two years, the scale has consumed a lot of capital, so there is a higher requirement for internal profit capital conversion. Both of the above banking professionals stated that the number of new customers and active customers has decreased in the past two years, so banks will consider more competition in existing businesses, with a similar situation expected next year. Priority for next year's corporate credit is to stabilize the foundation According to the People's Bank of China's "Third Quarter 2024 Financial Institution Loan Destination Statistics Report," Yuan Zheqi of Ping An Securities analyzed that in the third quarter, corporate loans are still the main focus in terms of resource allocation. For example, in the industrial medium and long-term loans sector, there was a 15.1% year-on-year increase by the end of the third quarter, while infrastructure medium and long-term loans increased by 10.8% year-on-year. Although the growth rate of these two sectors has decreased compared to the previous quarter, they are still higher than the industry-wide average loan growth rate. On November 19, a branch manager of a joint-stock bank in Guangzhou told Financial Union that they have recently been visiting Guangzhou Automobile Group, Baiyun Electric, and other municipal enterprises in preparation for next year's business initiatives. From the policies of the head office, the focus is still more on customers in the fields of scientific innovation, expertise, and new technology. However, there are two contradictory points: first, the credit approval requirements have not effectively differentiated between traditional and technology-driven enterprises, resulting in low approval rates for technology-driven enterprises; second, for traditional enterprises, there is less emphasis on local private enterprises with strength but less reputation, focusing more on large national enterprises. This could be due to risk factors and business potential assessment, but it is not favorable for branch offices to explore enterprise needs. Another business department representative of a city commercial bank in East China told Financial Union that they currently do not have a detailed plan for next year's initiatives, but for year-end reserves and next year's business initiatives, state-owned projects will still be the main focus, as serving local state-owned enterprises is the main direction of city commercial banks. In addition, efforts in the construction of new rural areas in urban-rural integration and inclusive finance are expected to continue as a source of incremental business. According to central bank data, by the end of the third quarter of 2024, RMB loans for small and micro enterprises in the banking industry increased by 14.5% year-on-year, which is 6.4 percentage points higher than the overall increase in RMB loans for financial institutions. In addition, the balance of agricultural production and operation loans increased by 12.6% year-on-year, and rural loans increased by 10.6% year-on-year by the end of the third quarter. Real estate industry cautiously optimistic about next year Regarding real estate business, the above city commercial bank personnel stated that they have noticed a resurgence in second-hand housing transactions in major cities recently, including more land auctions. Policy-driven "white list" projects are one of the incremental sources of company loans. According to data released by the Ministry of Housing and Urban-Rural Development, as of November 13, 2.85 million units have been delivered nationwide, with delivery rates in most areas exceeding 80%; as of October 31, the approved loan amount for "white list" projects in the real estate sector exceeded 3 trillion yuan. Previously, Minister of Housing and Urban-Rural Development Ni Hong had stated that by the end of the year, the scale of white list credit should increase to 4 trillion yuan. At a third-quarter performance meeting on November 1, a representative of China Merchants Bank had mentioned that China Merchants Bank will fully support the construction of a new mode of real estate development, meet the reasonable financing needs of real estate projects, and increase the issuance of loans for "white list" projects. Moreover, continued differentiation between project subsidiary company risks and group holding company risks, as well as strengthening risk control and post-lending management, will be maintained. In terms of mortgage loans, based on October's credit data, Wang Qing believes that the significant enhancement of support policies for the real estate sector, driving a recovery in the property market, as well as the boost in consumer durable goods consumption due to the "two new" policies, have led to a slight recovery in residential loans in October. The city commercial bank personnel mentioned above stated that the real estate sector next year should perform better than this year, with an overall cautious optimism. From the bank's perspective, they hope to increase profits by offering more mortgage loans, but currently, the net increase in mortgages is not very significant, likely due to purchasing power factors, and the situation is not expected to significantly improve next year. This article was originally published by the Financial Union, translated by GMTEight, edited by Chen Wenfang.