Guotou Securities: August social financing growth slows again; watch the effect of fiscal efforts in supporting subsequent loans.

Guotou Securities released a research report stating that in August, the year-on-year growth rate of social financing was 7.2%, down 0.2pct month-on-month. The monthly increment of social financing was 1.66 trillion yuan, a year-on-year decrease of 908.3 billion yuan, below market expectations; broad-caliber RMB loans grew 4.9% year-on-year, with new RMB loans of 60 billion yuan, a sharp year-on-year decrease of 530 billion yuan. Currently, the improvement in banks' income statements is being transmitted to balance sheet repair. The implementation of new regulations on insurance assets and liabilities brings deterministic demand for dividend asset allocation. The breakthrough increase in the interim dividend payout ratio of major banks for 26 years further strengthens the sector's dividend attributes. The bank is bullish on the absolute and excess returns of the sector going forward. The main views of Guotou Securities are as follows: I. Social financing growth slowed again, but the structure continued to optimize In August, the year-on-year growth rate of social financing was 7.2%, down 0.2pct month-on-month. The monthly increment of social financing was 1.66 trillion yuan, a year-on-year decrease of 908.3 billion yuan, below market expectations. Breaking it down: 1) New RMB loans were 55.2 billion yuan, a year-on-year decrease of 570.1 billion yuan; 2) Government bond financing was 1,009.7 billion yuan, a year-on-year decrease of 357.5 billion yuan, reflecting the relatively slow fiscal pace. From January to August, the issuance progress of government bonds (central government bonds + new local government bonds) was only 56%, the second-lowest level since 2020; 3) Direct financing was 335.1 billion yuan, a year-on-year increase of 155.7 billion yuan, with corporate bonds as the core driver. Since the beginning of the year, the cumulative share of direct financing in social financing rose by 0.12pct, while that of RMB loans fell by 0.76pct. Beyond demand, profound changes in the economic structure are driving the upgrading of the social financing structure; 4) Non-standard financing was 37.8 billion yuan, a year-on-year decrease of 178 billion yuan, with undiscounted bills as the core drag. II. Watch the effect of accelerated fiscal efforts in supporting subsequent RMB loans In August, broad-caliber RMB loans grew 4.9% year-on-year, down 0.2pct month-on-month. New RMB loans were 60 billion yuan, a sharp year-on-year decrease of 530 billion yuan, also below market expectations. Breaking it down: 1) Household loans turned negative again in August after a brief year-on-year increase in July. Among them, short-term household loans contracted by 121.9 billion yuan in the month, a year-on-year decrease of 132.4 billion yuan. Since the beginning of the year, cumulative short-term household loans have fallen by more than 1 trillion yuan, the combined result of limited demand and the rectification of internet platform loans. With new home sales still awaiting recovery and the substitution effect of housing provident fund loans, medium- and long-term household loans continued to show weak performance, with a year-on-year decrease of 102.2 billion yuan. 2) The year-on-year decline in corporate loans deepened. Among them, short-term corporate loans decreased by 230 billion yuan year-on-year, while bill discounting increased by 46.9 billion yuan year-on-year, still showing a certain seesaw effect. At the same time, regulators are actively addressing the difficulty of small and medium-sized enterprises in collecting payments, which may also have had some impact on the reading of short-term corporate loans; medium- and long-term corporate loans decreased by 150 billion yuan year-on-year. Looking ahead, with the gradual implementation of policy-based financial instruments in September and the high-density advancement of the "six networks" construction, support for medium- and long-term corporate loans is imminent. III. M1 growth stabilized and rebounded, while non-bank deposits continued to show a significant year-on-year decrease In August, M1 grew 4.1% year-on-year, up 0.1pct month-on-month, of which the growth rate of corporate demand deposits rose 0.3pct month-on-month, showing signs of fund activation; M2 grew 7.5% year-on-year, down 0.2pct month-on-month. The "M2-M1" scissors gap narrowed by 0.3pct month-on-month, while the "M2-social financing" scissors gap was flat month-on-month and has narrowed by 0.5pct cumulatively since January. Specifically on deposits, new deposits in August were 1.2 trillion yuan, a year-on-year decrease of 860 billion yuan, with non-bank deposits as the core disturbance, decreasing by about 620 billion yuan year-on-year. The bank understands this as mainly due to the base effect. In addition, in August, liquidity closely fluctuated around the policy interest rate while bond yields fell rapidly, which may also have suppressed the growth of non-bank deposits. In August, household deposits, corporate deposits, and fiscal deposits performed relatively steadily, decreasing by 70 billion yuan, 19.7 billion yuan, and 80 billion yuan year-on-year, respectively. Investment recommendations Currently, the improvement in banks' income statements is being transmitted to balance sheet repair. The implementation of new regulations on insurance assets and liabilities brings deterministic demand for dividend asset allocation. The breakthrough increase in the interim dividend payout ratio of major banks for 26 years further strengthens the sector's dividend attributes. Combined with the contraction of overseas liquidity and the marginal convergence of domestic real growth, the bank is bullish on the absolute and excess returns of the sector going forward. Recommended attention: 1) City commercial banks: Bank Of Beijing, Bank Of Jiangsu, and Bank Of Hangzhou; 2) Joint-stock banks: CITIC BANK, Ping An Bank; 3) State-owned major banks and other high-dividend varieties: Chongqing Rural Commercial Bank, Shanghai Rural Commercial Bank, Bank Of China, China Construction Bank Corporation. Risk warnings: Fiscal policy falling short of expectations; monetary policy magnitude exceeding expectations; real estate policy short-term shocks to bank asset quality.