Bank Financing Is Embarrassed Under "Asset Shortage"

In the eyes of most ordinary Chinese people, the safety and deposits of financial products are quite similar, and the flow of financial capital is not worth much concern. However, as such funds flow to the overheated bond market and try to use leverage to magnify revenue, they may not be foolproof after entering the "storm eye".

By the end of 2014, the balance of bank financial products funds was 15 trillion and 20 billion yuan, and the investment balance of bonds and money market tool assets increased from 38.44% to 43.75%, according to the data of the central bank's registration of Clearing Corp, the national banking financial information registration system.

After the stock market crash, a large number of financial capital flows to the bond market, and under the influence of China's loose monetary policy, the yield of corporate bonds has dropped to a new low of five years.

According to Peng Bo's survey of economists, it is overheated. Bond Market The possibility of adjustment is very high. Once the bond market is in turmoil, the risks faced by banks will increase sharply. In addition, in the case of increased leverage in the bond market, the market also expects regulators to try to curb it.

Zhang Zhiming, head of HSBC research in China, said the sudden fall in bond prices would pose a huge threat to leveraged transactions in financial products, which could trigger a sell-off. He said:

So far, people have always thought that no matter from the bank counters to buy that kind of financial products, there will be no default risk, so competition is centered around the rate of return.

If the government starts to restrain the excessive leverage level or allow default, it will trigger a large amount of redemption, resulting in concentrated selling. For banks, from the perspective of maintaining market share, it has to maintain the competitiveness of returns. This leads to the fact that financial products increase their yields by increasing leverage or lengthening the duration, thereby increasing the risk.

Gao Shanwen, chief economist of Anxin securities, told Bloomberg that with the shrinking demand for financing of real estate and local financing platforms, as well as the substantial adjustment of stock market later, a lot of financial funds were transferred to the bond market, and the rate of return was increased through time mismatch and leverage. This is superimposed with rigid payment, and in general, it is not transparent enough and lack of supervision. It may become the next storm in the financial market.

If the bond market bubble burst, it is likely that losses will be transferred to the bank balance sheet, which will lead to a decline in the banking sector and a direct trigger. Stock market The adjustment may also lead to capital loss and credit crunch, thus affecting the credit market and the real economy.

There is such a risk that the real harm of the burst of the debt market bubble is greater than that of the stock market crash of July.

On the one hand, "less money and fewer projects" is a reality. Liabilities In order to maintain market share, financial institutions have to compress interest margins and even bear interest spreads. On the other hand, under the pressure of yield, asset ends can only increase leverage or prolong the duration.

If A shares are booming in the first half of this year, a lot of money can also get a good return from the stock market. After the stock market crash, these funds have been unable to find suitable investment targets in the market. The increasingly serious shortage of assets has led to a "cold winter" in bank financing.

"The cost of bank financing at the liability side is relatively rigid, and the financial spreads will be squeezed. However, if the proceeds fall, the share of the bank's wealth management market will be affected." Ma Kunpeng, a banking analyst at the state securities company, said.

For the selection of the management authorities in such a predicament, a large commercial bank's information management department said that the products with differential and even hang ups now exist, which is equal to the consumption of retained earnings. "Now in a stalemate, the market share will not be easily lost. This is the most direct indicator, and the pressure will be very great if it comes down."

Li Linxia, a CNBenefit research firm at the consulting firm, said that some financial products had already been put up with bad points, while banks did not want to lower their yields in order to maintain market share.

According to CNBenefit data, China's one-year AAA class bond yields fell 98 basis points to 3.02% in the past six months, while the expected rate of return of financial products fell by 62 basis points to 4.53% during the same period.