Shanghai’s financing costs have declined steadily in the first three quarters, and credit increment has picked up.

Shanghai’s financing costs stabilized but declined in the first three quarters

The balance of domestic and foreign currency loans increased by 6.5% year-on-year, and credit growth rebounded after bottoming out in the second quarter. The weighted average interest rate of newly issued corporate loans in the city in September was 3.38%, remaining at a historically low range.

Yesterday, the Shanghai headquarters of the People’s Bank of China stated at a regular press conference for the fourth quarter of 2023 that Shanghai’s total credit volume has maintained growth in the first three quarters of this year, and financing costs have stabilized but declined.

In terms of credit growth, at the end of September, the city’s local and foreign currency loan balance was 11.02 trillion yuan, a year-on-year increase of 6.5%. Among them, the balance of RMB loans was 10.43 trillion yuan, a year-on-year increase of 8.4%. From the first to the third quarter, the city’s RMB loans increased by 397.5 billion yuan, 125.8 billion yuan and 147.4 billion yuan respectively. Credit growth rebounded after bottoming out in the second quarter.

In terms of financing costs, in September, the weighted average interest rate of new corporate loans in the city was 3.38%, a decrease of 39 basis points from the same period last year, continuing to remain at a historically low range, and one of the lowest in the country. Among them, the weighted average interest rate of small and micro loans was 3.61%, a decrease of 38 basis points from the same period last year.

Looking at different objects, on the one hand, corporate loans have maintained rapid growth, and medium and long-term loans have increased significantly. At the end of September, the city’s RMB corporate loan balance increased by 9.6% year-on-year, and the growth rate continued to be higher than that of various loans. In terms of incremental growth, in the first three quarters, corporate loans increased by 564.5 billion yuan. The term structure continues to be medium- and long-term. At the end of September, medium- and long-term corporate loans grew by 15.4%, 11.4 percentage points higher than the growth rate of short-term loans. In terms of key areas, loans to small and micro enterprises and private enterprises have grown rapidly. At the end of September, the city’s inclusive small and micro loan balance increased by 25.1% year-on-year, and the balance of private enterprise loans increased by 12.2% year-on-year, both of which were significantly higher than the growth rates of various loans. The balance of medium- and long-term loans in the manufacturing industry, loans to high-tech enterprises, and loans to technology-based small and medium-sized enterprises increased by 39.9%, 14.9%, and 31.7% respectively year-on-year, which were higher than the overall growth rate of various loans in the city.

On the other hand, the growth rate of household loans has slowed down, and short-term consumer credit demand has recovered. At the end of September, the city’s RMB household loan balance increased by 3.9% year-on-year, and the growth rate was 0.5 percentage points lower than the end of last month. In terms of incremental growth, in the first three quarters, RMB household loans increased by 55.8 billion yuan, a decrease of 29.2 billion yuan year-on-year. Among them, short-term loans increased by 40.8 billion yuan, an increase of 15.2 billion yuan year-on-year. The rebound in offline consumption and travel consumption drove the continued recovery of short-term consumer credit demand.

Various deposits maintained growth and the growth rate picked up. At the end of September, the city’s local and foreign currency deposit balance was 20.02 trillion yuan, a year-on-year increase of 4.7%, and the growth rate was 0.5 percentage points higher than the end of the previous month. Among them, the balance of RMB deposits was 18.98 trillion yuan, a year-on-year increase of 6.1%, and the growth rate was 0.6 percentage points higher than the end of last month. In terms of sectors, RMB household deposits and non-financial corporate deposit balances increased by 22.5% and 1.3% respectively. Driven by factors such as downward market interest rates, weak expectations, and poor performance of the capital market, household deposits continued the trend of regularization since the fourth quarter of last year, with time and other deposit balances accounting for 72.8%, a year-on-year increase of 4.6 percentage points.

The scale of social financing is generally stable. In the first three quarters, the city’s social financing scale increased by 603.6 billion yuan. RMB loans issued to the real economy increased by 620.1 billion yuan, which has a significant boost to the scale of social financing. Equity financing increased by 93.7 billion yuan, an increase of 3.8 billion yuan year-on-year. Among them, net equity financing in August was 39.2 billion yuan, the highest monthly value since the beginning of the year.

Real estate credit is basically stable. As of October 31, the city had completed reductions in interest rates on approximately 265,100 first-home loans, with a loan amount of approximately 263.2 billion yuan, and the weighted average interest rate of loans dropped by nearly 45 basis points. At the same time, the city’s real estate credit operations have generally stabilized. At the end of September, the city’s RMB real estate loan balance was 2.68 trillion yuan, a year-on-year increase of 1.7%, an increase of 0.3 percentage points from the end of last month. Among them, the balance of personal housing loans decreased by 2% year-on-year, and the balance of real estate development loans increased by 9.7% year-on-year. (Trainee reporter Liu Huiyu)

(Editors: Yan Yuan, Xuan Zhaoqiang)

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