Morgan Stanley-China Financials Why slower loan growth and notably slower ...-107586598

MApril14,202408:08PMGMTUpdateChinaFinancialsAsiaPacificMorganStanleyAsiaLimited++8522848-6729+8523963-2224WhyslowerloangrowthandRichardXu,CFA+8523963-4624notablyslowercorporatedepositgrowthinMarch?EquityAnalystRichard.Xu@morganstanley.comMarchTSFgrowthfurtherslowedto8.7%yoy,asexpected,mainlyduetoslowerRMBloans.SlowerloanandcorporateBerylYangdepositgrowthcouldmeanbanksarereducingsomeselfcirculatingloans,whichcouldsavecapitalandsupportbankResearchAssociateNIMs.WeexpectTSFgrowthwillslowtowards8%in2024.Beryl.Yang@morganstanley.comRMBloangrowthfurtherrationalized,whichmaynotbeabadthingforbanks.ChiyaoHuangHeadlineTSFgrowthfurthermoderatedto8.7%,inlinewithourexpectations.NewTSF,atRmb4.87tn,isRmb514bnloweryoy,mainlydrivenbyRmb656bnyoylowerEquityAnalystnewRmbloansinMarch.NewcorporateloansaddedRmb2.34tninMarch,downChiyao.Huang@morganstanley.com13%yoy,draggedbyRmb470bnlowermid-tolong-termcorporateloansyoy,itselflikelydrivenby:1)slowerdemandfromlocalSOEsduetoLGFVtightening;and2)ChinaFinancialsAttractivelowerselfcirculatingloansduetoreducedwindowguidancetosupportheadlineTSFgrowth.WebelievethiscouldactuallybegoodforbankNIMsassuchloansAsiaPacificleadtohigh-costtermdepositssittingatbanksandnegativespreadsforbanks.NewIndustryViewretailcreditwasloweronayoybasisvs.ahighbaseinMarch23,butbothnewshort-andlong-termpersonalloansseem...