This is what boosted China banks' April TSF of RMB 1.75t

Find out what makes up 55% of the April TSF.

According to Barclays, the People’s Bank of China (PBOC) reported on 10 May 2013 that April new RMB loans reached RMB 793bn, in-line with earlier media reported market expectation of RMB 800bn. 

Here's more from Barclays:

Total social financing (TSF) continued its strong momentum, and hit RMB 1.75tn in April (down from RMB 2.55tn in March; but much higher than RMB 0.96tn in April-12).

The y/y higher TSF was mainly driven by non-bank financing (especially trust loans and bank acceptance) which contributed 55% to April TSF. The in-line new loan growth was mainly supported by mid- to long-term (MLT) retail loans (+RMB 231bn, accounting for 29% of total new loans), but offset by the record weak new short-term (ST) corporate loans (+RMB 54bn) since Aug-10.

RMB deposits recorded a seasonal drop of RMB 100bn in April-13 (vs. -RMB 466n in April-12), after the record high growth in March (RMB 4.2tn). The rapid growth of non-bank lending calls for more regulations.

Continued high TSF driven by non-bank financing
April TSF was RMB 1.75tn, lower than record high of RMB 2.55tn in March, but much higher than RMB 964bn in April-12. The strong y/y growth in TSF was mainly supported by non-bank financing, especially in trust loans (+RMB 195bn in April-13 vs. +RMB 4bn in April-12) and bank acceptance (+RMB 221bn in April-13 vs. +RMB 28bn in April-12).

Corporate bonds issuance was RMB 190bn in April, down from RMB 389bn in March, drew a similar pattern as last year (RMB 89bn in April-12 vs. RMB 197bn in March-12).

TSF already reached RMB 7.91tn in the first four months of 2013 (vs. RMB 4.85tn in 4M12), assuming 40% full-year contribution, TSF is on track to reach RMB 19-20tn in 2013, which is obviously too excessive! New RMB loans of RMB 3.55tn only accounted for 45% of TSF, down from 65% in 4M12.

New RMB loans driven by MLT retail loans; ST corporate loan growth weakest since Aug-2010
New RMB loans in April amounted to RMB 793bn (vs. RMB 682bn in April-12, and RMB 1.06tn in March-13), in-line with earlier media reported market expectation of RMB 800bn, but slightly higher than Bloomberg consensus of RMB 770bn.

The y/y higher new loan growth was mainly attributable to strong growth in MLT retail loans (+RMB 231bn in April-13 vs. +RMB 63bn in April-12), which are primarily mortgages, helped to offset the low ST corporate loans (+RMB 54bn in April-13 vs. +RMB 151bn in April-12), probably due to: 1) continued weak corporate activities, and

2) more non-bank financing channels used by SMEs (eg. entrusted loans and trust loans). Discounted bills continued its recovering trend, and recorded an increase of RMB 169bn (vs. RMB 118bn in March).

Financing structure wise, MLT new loans was largely stable at RMB 406bn, while ST new loans saw pull-back to RMB 363bn in April after big jump of RMB 620bn in March. MLT new bond was RMB 167bn, and ST new bond was RMB 25bn, both significantly lower than the RMB 347bn and RMB 95bn.

Seasonal deposit drop in April
April new deposits posted a seasonal drop of RMB 100bn (vs. -RMB 466n in April-12). Structure wise, we see big outflow from retail deposits (-RMB 934bn in April-13 vs. -RMB 638bn in April-12), and weak corporate deposit growth (+RMB 311bn in April-13 vs. -RMB 297bn in April-12).

The main reasons for the seasonal move, in our view, include: 1) effect of wealth management products (WMPs) that are designed to mature at the end of each quarter to meet regulatory LDR requirement but rolled over to WMPs at beginning of April; and

2) tax payment at the first month of each quarter triggering deposits moving from general deposits to fiscal deposits (+RMB 522bn in April).

Money supply indicators M0, M1 and M2 at end-Feb 2013 were RMB 5.56tn, RMB 30.76tn and RMB 103.26tn, up 10.8%, 11.9% and 16.1% y/y, respectively, all maintained strong growth momentum.