Deleveraging continued in June with ongoing new household savings shift

Research evidence excerpt

Deleveraging continued in June with ongoing new household savings shift

Update

July 15, 2026 11:15 AM GMT

Morgan Stanley Asia Limited+MChina Financials | Asia Pacific Richard Xu, CFA

Equity Analyst

Deleveraging continued in June Richard.Xu@morganstanley.comBeryl Yang +852 2848-6729

Research Associate

Beryl.Yang@morganstanley.com +852 3963-2224

with ongoing new household Chiyao Huang

Chiyao.Huang@morganstanley.com +852 3963-4624

savings shift Chenqian Liu

Chenqian.Liu@morganstanley.com +852 3963-0359

Key Takeaways

June TSF growth slowed further to 7.4% yoy, continuing the trend of moderating

headline credit growth as policymakers prioritize quality over quantity.

Rmb1.76tn in RMB loans were added in June. Outstanding RMB loan growth fell

to 5.3% yoy, reflecting ongoing anti-involution efforts and reduced window China Financials

Asia Pacific

guidance. Industry View Attractive

Household loans recovered modestly with seasonality after a net decline in May. Related reports:

New household loans were still 56% lower yoy; new corporate loans also fell yoy. China Financials: Further de-leveraging or

Government bond issuance remained back-end loaded, with 46% of the annual positive development loop? How to invest? (9

quota utilized in 1H26 vs. 55% in 1H25. Nevertheless, it remains the key TSF Jul 2026)

driver. China Financials: Another Milestone Policy

Change – No More Quantitative Target for Household deposit growth moderated to 7.1% yoy; non-FI deposit growth

Inclusive SME loans (20 May 2026) remained high at 28.6%. M1 and M2 growth decelerated, to 4% and 8% yoy,

China Financials: May TSF shows that the trend respectively.

of quality over quantity continues (12 Jun 2026)

Continued rationalization in credit growth: RMB loans showed some recovery at