7月信贷需求走弱 政府借贷支撑社会融资增长

govt borrowing supported TSF growth Asia I China JulyNewLoans Loangrowth NewTSF TSFgrowthRMB bn% yoyRMB bn% yoy Actual-3405.1 BofA from a revised 99.2 in June, the highest since July 2024. The move reflected CNY appreciation against the basket on a yoy basis, alongside a yoy contraction in thesix-month moving average of new TSF.Loan demand remained soft despite stronger TSF +85235083909anna.zhou@bofa.comBenson Wu, CFAChina&KoreaEconomistMerrill Lynch (Hong Kong) +852 35085047benson.wu@bofa.comHelen QiaoChina & Asia Economist Loan growth undershot market expectations again in July, with RMB loans contracting byRMB34Obn (vs.consensus of a RMB10Obn decline).However,an acceleration in government bond issuance, which increased by RMB1,32Obn, helped lift TSF growth toRMB1,406bn,exceeding market expectations.Outstanding loan growth eased to 5.1%yoy from 5.2%, while TSF growth held steady at 7.4%. Meanwhile, M1 growth remainedunchanged at 4.0%, while M2 growth softened slightly to 7.7%.Household and corporate credit demand remained soft Merill Lynch (Hong Kong)+85235083961helen.qiao@bofa.com Household and corporate borrowing both remained weak in July.Household loanscontracted by RMB460bn (vs.-RMB489bn in July 2025), with declines in both short-term and medium-to-long-term lending. Mortgage-related medium-to-long-term householdloans fell by RMB120bn (vs. -RMB110bn a year earlier), suggesting the housing markethas yet to stabilize meaningfully.Corporate loans also contracted by RMB130Obn (vs.+RMB6Obn in July 2025),while B/S: balance sheet BA:banker's acceptanceCEWC: Central Economic Work Conferencegovt: governmentHH: householdLGSB: local govt special-purpose bondLNY: Lunar New YearMLT: medium to long termMoF: Ministry of FinanceNBS: National Bureau of StatisticsNEER: nominal effective exchange ratePBoC: People's Bank of ChinaRRR: reserve requirement ratioST: short termTSF: total social financing medium-to-long-term corporate loans, a key proxy for capex demand, declined byRMB23Obn,pointing to subdued investment activity.Although the first month of eachquarter is typically weak due to seasonality, July's outturn was softer than usual,underscoring persistent weakness in credit demand. Faster fiscal spending likely to cushion weak credit growthOverall, July's credit data is consistent with the broader slowdown in domestic activity. Looking ahead, while expectations for additional fiscal stimulus is low, we expect fiscalexpenditure to be accelerated over the remainer of the year, which should put a floorunder FAl growth and help stabilize credit expansion.However, with private investmentand property-related borrowing still weak, any credit recovery is likely to remain gradualand largely government-led. BofA Securities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 4 to 5. 99.2 previously)BofA China Financial Condition Indicator (FCI) and Activity Coincident Indicator (ACT) (2010-26) index Exhibit 3: RMB loan growth and M2 growth slowed to 5.1% yoy and7.7% yoy, respectivelyGrowth of M2, TSF and RMB loans (2014-26) corporate loans (RMB-130bn) were worse than last yearNew loans breakdown growth remained elevated at 14.1% yoyTSF growth breakdown Exhibit 9: July new household deposits ticked up (RMB11.9tn), whileloans outflow (RMB-1.1tn) Household new deposits and new loans: 12-month rolling sum (2014-26) DisclosuresImportant Disclosures profitability of the Bank's sales and trading businesses relating to the class of securities or financial instruments for which such analyst is responsible. Prices are indicativeandforinformation purposes only.Except as otherwise stated in the report,forany recommendation in relation to an equity security.the price referenced is the publicly traded price of thesecurity as of close of business on the day priortothe date of the reportor, if the report is published during intraday trading, the price referenced is indicativeof the tradedprice as of the date and time of the report and in relation to a debt security (including equity preferred and CDS), prices are indicative as of the date and time of the report and are from varioussources including BofA Securities trading desks. Recipients who are not institutional investors or market professionals should seek the advice of their independent financial advisor before considering information in this report in connection with any investment decision, or for a necessary explanation of its contents.Officers of BofAS or one or more of its affliates (other than research analysts) may have a financial interest in securities of the issuer(s) or in related investments. Individuals identified as economists do not function as researc