穆迪-2017Q4中国影子银行监测报告_60页_2mb

Quarterly China Shadow Banking Monitor Summary

Core Content

This report provides an overview of the state of China's shadow banking sector in 2017, highlighting the impact of intensified regulatory measures, liquidity conditions, and the shifting composition of shadow banking activities.

Main Points

• Shadow Banking Growth: Shadow banking assets barely grew in 2017, increasing by RMB1.1 trillion, compared to RMB11.2 trillion in 2016. The sector's share of GDP fell to 79.3% at year-end 2017, down from a peak of 86.7% in 2016.

• Regulatory Impact: The regulatory crackdown on shadow banking segments such as wealth management products (WMPs) and non-bank financial institutions' (NBFIs) asset management plans has spread to core shadow banking components like entrusted loans, trust loans, and undiscounted bankers' acceptances, slowing their growth and reducing credit supply to the real economy.

• Credit Supply Shift: Formal bank lending has taken a larger share of credit supply, reaching 71% of total social financing (TSF) in 2017, the highest since the start of the decade. This shift reflects both regulatory constraints and the decline in corporate bond financing.

• Liquidity Conditions: Liquidity tightened throughout 2017, particularly affecting smaller banks and NBFIs. The PBOC raised reverse repo rates and increased direct lending to offset these conditions, but the trend of tighter liquidity continued.

• Offshore Financing: With domestic credit conditions tightening, some borrowers, especially property developers and local government financial vehicles (LGFVs), turned to offshore bond markets for funding, with USD35 billion in dollar-denominated bonds issued by property developers in 2017.

• WMPs Decline: WMPs, a major component of shadow banking, saw a slowdown in growth, with their share of shadow banking assets declining from 47% at end-2016 to 40% at end-2017. The shift in WMP investor base from interbank to retail investors may increase funding costs for smaller banks.

• Trust Sector Expansion: The trust sector expanded by about 30% in the first three quarters of 2017, driven by increased lending to corporate borrowers, real estate, and infrastructure sectors. However, tightening regulations on bank-trust cooperation arrangements increased refinancing risks for certain sectors.

• Interconnectedness Reduction: Regulatory measures have reduced the interconnectedness between banks and NBFIs, with banks' net claims on NBFIs remaining stable after a decline in Q3 2017. The November 2017 asset management guidelines aim to further reduce this interconnectedness and improve transparency.

• Wholesale Funding Trends: Small and midsize banks reduced their reliance on wholesale funding, while NBFIs and other financial institutions increased their use of it. This reflects tighter regulations on interbank funding and the central bank's direct lending initiatives.

• Bond Issuance Delays: Over 700 cases of bond issuance were delayed or cancelled in 2017, involving over RMB600 billion, indicating tighter domestic financing conditions.

• Regulatory Clampdown: New regulatory measures, including tighter oversight of asset management and trust activities, are expected to continue into 2018, potentially further constraining shadow banking growth and credit availability.

Key Information

• Shadow Banking Assets: RMB65.6 trillion at end-2017, up from RMB54.4 trillion at end-2016.
• WMPs Growth: Decelerated to 1.7% year-on-year in December 2017, down from 8.0% in June 2017 and 23.6% in 2016.
• Trust Loans: Grew by about 30% in the first three quarters of 2017, becoming a more prominent channel for credit to corporate and infrastructure sectors.
• Interbank Funding: Small and midsize banks reduced interbank liabilities and NCDs, while the PBOC increased direct lending to banks.
• TSF Composition: Formal bank lending accounted for 71% of TSF in 2017, with core shadow banking components making up around 18% of new TSF flows.
• Regulatory Impact on Credit Supply: Regulatory actions have constrained credit supply to marginal borrowers, increasing refinancing risks for sectors like real estate and local government entities.

Conclusion

The shadow banking sector in China experienced a slowdown in growth in 2017 due to intensified regulatory actions and tighter liquidity conditions. These changes have shifted credit supply towards formal bank lending, reduced interconnectedness between banks and non-banks, and increased refinancing risks for certain sectors. The regulatory environment is expected to continue constraining shadow banking activities in 2018, with implications for credit availability and financial stability.