The financial system is giving 1.5 trillion yuan to enterprises this year: who will pay? How?

category:Finance
 The financial system is giving 1.5 trillion yuan to enterprises this year: who will pay? How?


Push the cost of financing down again

Li Peijia, a senior researcher at the Research Institute of the Bank of China, believes that the financing of small and micro enterprises is difficult and expensive. The executive meeting of the State Council encouraged the financial system to give reasonable benefits to enterprises, mainly to promote the reduction of enterprise financing costs. In fact, the current interest cost of corporate loans has dropped to a historical low.

Data shows that the weighted average interest rate of RMB loans of financial institutions in the first quarter of this year was 5.08%, down 0.61 percentage points compared with the same period of last year, the lowest since 2007, only higher than December 2016. In terms of bond issuance rates, the weighted average corporate bond issuance rate fell to a record low of 4.07% in April, according to Li.

In terms of monetary policy, a series of strong support measures have been launched in the first half of the year, including reducing the reserve ratio for deposits three times, increasing the rediscount amount of 1.8 trillion yuan of re loans, introducing the credit loan support plan for small and micro enterprises, and implementing the periodical extension of principal and interest repayment policy for small and micro enterprises.

Reasonable profit sharing by cooperation of multiple parties

At the beginning of June, the peoples Bank of China, together with the China Banking Regulatory Commission and other ministries and commissions, issued the guiding opinions on Further Strengthening the financial services of small and medium-sized micro enterprises, which clearly required that national banks should make reasonable profits, ensure that the loan coverage of small and medium-sized micro enterprises was significantly expanded, and the comprehensive financing cost was significantly reduced. The internal transfer pricing preference of national banks shall not be less than 50 basis points, and the loan growth rate of inclusive small and micro enterprises of five large state-owned commercial banks shall be higher than 40%. The development and policy banks shall put in place a special credit line of 350 billion yuan, and support the small and micro enterprises to return to work and production with preferential interest rate.

The above guidance is aimed at national banks, especially large banks and development and policy banks. In addition to large banks and powerful joint-stock commercial banks, there are also a large number of small and medium-sized banks, which are also the main force serving small and medium-sized enterprises. According to the analysis of some research institutions, in 2019, the total net profit of Chinas listed banks will be close to 1.7 trillion yuan, and the total profit of the banking industry will be about 2 trillion yuan. To achieve 1.5 trillion yuan of profit this year, the pressure of banking institutions is not small.

A large number of small and medium-sized financial institutions will face losses if the bank only reduces the asset-side interest rate, and the increase of financial risk does not conform to the principle of reasonable profit. According to Guoxin Securities Research Report, 1.5 trillion yuan of profit space or difficulty is solely borne by the banking industry.

Zheshang securities recently published a research report that the regulatory authorities stressed that reasonable transfer of profits is to transfer profits to entities on the premise of maintaining the commercial sustainability of banks. To maintain the sustainability of banking business, if the income side of the bank declines, then the cost side must also decline. It is suggested that the regulatory authorities can make room by reducing standards, targeted instruments and even interest rates.

For most commercial banks, they are trying to find a balance between profit growth and profit transfer to enterprises.

Liu Guiping, President of China Construction Bank, said that the epidemic will have an impact on the operation and management of commercial banks. China Construction Bank will further optimize the structure of assets and liabilities, business structure and customer structure through refined management, and at the same time, by strengthening the ability of pricing management and interest rate risk management and control, we are confident that we will try our best to maintain stable growth of business under difficult circumstances.

Yi Gang, governor of the peoples Bank of China, recently introduced the composition of 1.5 trillion yuan at Lujiazui forum. He said that since this year, the financial sector has made profits to enterprises mainly in three ways: first, by reducing interest rates, second, by direct monetary policy tools to promote the transfer of profits, third, by banks to reduce fees. It is estimated that the financial system will yield 1.5 trillion yuan to enterprises this year.

It can also be seen from the above statements that the main body of interest transfer is obviously not only commercial banks. In addition, on June 18, the Ministry of Finance successfully issued the first batch of special anti epidemic bonds through bidding. The head of the Treasury Department of the Ministry of Finance said on June 17 that this years 1 trillion yuan special anti epidemic treasury bonds will be issued in a market-oriented way, all of which will be open to public bidding by members of the bookkeeping underwriting group of treasury bonds. According to statistics, in the first four months of this year, corporate credit bonds have been issued 4.6 trillion yuan, up 46% year on year. Private enterprises have raised 270 billion yuan in debt financing, with the issuance volume reaching a new high in recent years.

However, while making profits, we should also pay attention to relevant risks. Yi Gang clearly pointed out that the financial support policy during the epidemic response period is phased, we should pay attention to the policy design and incentive compatibility, prevent moral hazard, pay attention to the sequelae of the policy, the total amount should be appropriate, and consider the timely withdrawal of policy tools in advance.

Industry insiders suggest that more policy financial institutions should take on the function of profit giving enterprises, and at the same time, we should increase the connection between financial policies and commercial financial institutions, so as to better serve small and medium-sized enterprises.

Liu Ying, a researcher at Chongyang Financial Research Institute of Renmin University of China, said that the specific measures taken by the financial system to make profits reasonably available to enterprises should integrate the supporting functions of policy finance, development finance and commercial finance, and achieve the following three combinations. First, adhere to the combination of policy finance and inclusive financial instruments, increase the precise support of finance to enterprises, realize the general reduction of financing cost, increase the capital supply from the scale, and reduce the financing cost of enterprises. Second, adhere to the combination of direct financing and indirect financing. We should not only strengthen the credit support of traditional banks to enterprises, but also build a strong capital market, and increase the direct financial support to enterprises through registration systems such as science and technology innovation board. Third, adhere to the combination of traditional finance and modern finance. Under the impact of the epidemic, modern financial technology should be used to support enterprises. In addition, in terms of fiscal policy, the implementation of the policy of tax reduction and fee reduction has achieved results, reducing the burden for the market main body. Source: Yang Bin, editor in charge of China Economic Net_ NF4368

Liu Ying, a researcher at Chongyang Financial Research Institute of Renmin University of China, said that the specific measures taken by the financial system to make profits reasonably available to enterprises should integrate the supporting functions of policy finance, development finance and commercial finance, and achieve the following three combinations. First, adhere to the combination of policy finance and inclusive financial instruments, increase the precise support of finance to enterprises, realize the general reduction of financing cost, increase the capital supply from the scale, and reduce the financing cost of enterprises. Second, adhere to the combination of direct financing and indirect financing. We should not only strengthen the credit support of traditional banks to enterprises, but also build a strong capital market, and increase the direct financial support to enterprises through registration systems such as science and technology innovation board. Third, adhere to the combination of traditional finance and modern finance. Under the impact of the epidemic, modern financial technology should be used to support enterprises. In addition, in terms of fiscal policy, the implementation of the policy of tax reduction and fee reduction has achieved results, reducing the burden for the market main body.