From the main regulatory indicators in the fourth quarter, the industry’s profit in 2021 increased by 12.6% year-on-year, and the profit in a single quarter increased by 16.8% year-on-year, with the growth rate reaching a new high since 2015. The interest margin stabilized and improved (increased by 1bp month on month), the asset quality index further improved, and the scale growth rate was higher than that in the third quarter driven by large banks.
Based on the recent policy and financial data, the management has confidence and determination in the steady growth and real estate policies, and has room and tools to make efforts. The policies will continue to make efforts until the economic and real estate data and expectations improve.
Reiterate the view that steady growth continues to catalyze and firmly optimistic about the bank market. Fully optimistic about the industry, individual stocks recommend high-quality regional banks: such as Bank Of Hangzhou Co.Ltd(600926) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Jiangsu Co.Ltd(600919) , etc.; continuous recommendation of core targets: Bank Of Ningbo Co.Ltd(002142) , China Merchants Bank Co.Ltd(600036) , Postal Savings Bank Of China Co.Ltd(601658) , focusing on the value of undervalued targets.
In the fourth quarter, the single quarter profit increased by 16.8%, a new high since 2015
In 2021, the net profit of commercial banks increased by 12.6% year-on-year, which was further improved compared with the first three quarters (+ 11.5%, YoY). In the fourth quarter, the single quarter increased by 16.8% year-on-year, the growth rate was the highest since 2015. Specifically, in 2021, the net profits of large banks / joint-stock banks / urban commercial banks / rural commercial banks increased by 12.7% / 13.4% / 11.6% / 9.1% respectively year-on-year. Combined with the performance express of listed banks, the steady growth of revenue brought by the simultaneous rise of volume and price and the improvement of bank asset quality are the core factors of high profit growth.
The growth rate of industry scale increased in the fourth quarter, mainly driven by large banks
In the fourth quarter, the asset scale of commercial banks increased by 8.6% year-on-year, an increase of 0.3 percentage points over the third quarter. In terms of different types of banks, the asset scale of large banks / joint-stock banks / urban commercial banks / rural commercial banks increased by 7.8% / 7.5% / 9.7% / 10.0% respectively year-on-year. Only the scale growth rate of large banks increased year-on-year, 0.82 percentage points higher than that in the third quarter, and the scale growth rate of joint-stock banks / urban commercial banks / rural commercial banks decreased by 0.23/0.04/0.38 percentage points respectively. The increase in the growth rate of industry scale is expected to be affected by the easing of the regulatory pressure on real estate financing in the fourth quarter and the improvement of the investment of real estate related loans. At the same time, the regulatory authorities adopted a positive monetary policy and the one-year LPR interest rate fell. However, the slowdown in the growth of small and medium-sized banks, combined with the relatively high proportion of bills in the new credit structure in the fourth quarter, also reflects that China’s credit demand is still weak in the fourth quarter.
In the fourth quarter, the interest rate spread increased by 1bp month on month, and the non-performing / concern rate continued to decline
The interest margin of the industry in the fourth quarter increased by 1bp to 2.08% month on month compared with the third quarter, but the performance was differentiated. The interest margin of large banks / urban commercial banks / rural commercial banks increased by 1bp / 2bp / 7bp to 2.04% / 1.91% / 2.33% month on month respectively, and the interest margin of joint-stock banks decreased by 2bp to 2.13% month on month. It is expected to benefit from the continuous improvement of the interest rate gap of new loans and retail market.
In the fourth quarter, the proportion of bank non-performing loans / special loans decreased by 2bp / 2bp to 1.73% / 2.31% respectively compared with the third quarter. Under the background of stable overall asset quality of the industry, the provision coverage rate was basically unchanged month on month, at 197%. We believe that although China’s economic pressure has increased, the steady growth policy has continued to increase, which will help the banking industry maintain a stable business environment and fundamentals.
Risk warning: large-scale outbreak of real estate default risk; The economy fell sharply, exceeding expectations.
