In 2021, the banking industry will show an obvious trend of improvement and support for the real economy will continue to increase. Looking forward to 2022, many brokerage analysts expect that the bank operation is expected to remain stable, but the rebound pressure of non-performing assets is still large. In terms of valuation, the current valuation level of the banking sector has fully reflected market expectations. The steady progress of the credit easing policy will create a stable market environment for banking operations, and the valuation level of the banking sector is expected to improve.
there is room for upward revenue growth of listed banks
Many analysts believe that bank operation is expected to remain stable in 2022.
According to the report recently released by Bank Of China Limited(601988) Research Institute, the net profit of commercial banks will increase by nearly 6% year-on-year in 2022. In terms of interest income, the net interest margin stabilized and rebounded; In terms of non interest income, the net worth transformation of wealth management business is coming to an end, the transformation pressure of stock products is released, and the contribution of wealth management business income will continue to increase in 2022. On the whole, the scale of non interest income will maintain growth in 2022, and the proportion of non interest income will further expand.
“In 2022, the fundamental outlook of the banking industry will continue to be stable as a whole, and will keep pace with the overall economic fundamentals.” Huaxi Securities Co.Ltd(002926) Liu Zhiping, chief analyst of banking industry, believes that there is still room for upward revenue growth of listed banks in 2022, which is expected to rise to more than 10% as a whole. Under the background of slight increase in credit cost, the net profit is expected to increase by 9% year-on-year.
China Merchants Securities Co.Ltd(600999) Liao Zhiming, chief analyst of the banking industry, predicts that considering the role of the new deposit pricing policy and the uncertainty of economic fundamentals, there is downward pressure on the interest rate of newly issued loans, and it is expected that the bank net interest margin will be under slight pressure in 2022. At the same time, the asset scale has expanded steadily, and the credit cost has remained stable. It is expected that the overall profit growth rate of A-share listed banks will be about 6%.
In terms of interest margin, Ping An Securities analyst yuan Zhenqi believes that there is still further downward pressure on the asset side, but under the guidance of policies, the bank’s asset side structure is expected to be further optimized, so as to support the annual interest margin to remain relatively stable. It is expected that the annual interest margin performance will be slightly lower than that in 2021.
disposal of non-performing assets will be the focus
According to the data of the CBRC, as of the end of the third quarter, the balance of non-performing loans of commercial banks was 2.8 trillion yuan, an increase of 42.7 billion yuan over the end of the previous quarter; The non-performing loan ratio of commercial banks was 1.75%, down 0.01 percentage points from the end of the previous quarter.
Zeng Gang, deputy director of the national finance and development laboratory, said that from the trend of non-performing loan balance in recent years, the rising trend of non-performing asset balance has been curbed, and the rising range has been significantly lower than the asset growth rate. However, it should also be noted that since this year, the growth rate of retail non-performing assets of commercial banks has been faster than the overall growth level of non-performing assets. The disposal of retail non-performing assets of banks will be the focus of the next step.
Looking forward to 2022, Yuan Zhenqi analyzed that the bank’s operating risk may rise marginally in the future, but the overall bad burden of the industry has been relatively fully resolved in the past 3-4 years. It is expected that the pressure on the generation of bad debts of banks will rise in 2022, but the possibility of large-scale credit risk exposure is low.
Wang Chaodi, chief inspector, director of the general office and spokesman of the China Banking and Insurance Regulatory Commission, also mentioned that the rebound pressure on non-performing assets is still large due to the impact of the epidemic and the expiration of the deferred principal and interest payment policy.
valuation is expected to increase
Data show that as of December 23, China Citic Bank Corporation Limited(601998) index closed up 0.12%, up 1.48% this year, and the price to book ratio was 0.63 times.
Liao Zhiming said that at present, the factors suppressing bank valuation have been significantly alleviated; Increased steady growth and improved economic expectations will also support the improvement of bank valuation.
In Liu Zhiping’s view, the overall prosperity of the industry is still affected by the economic fundamentals. It is difficult to improve the prosperity of the industry without improvement. However, the current valuation level has fully reflected the market’s expectations of the economy or the industry. In the future, under the expected improvement, the valuation repair of the sector will be realized quickly. It is necessary to pay close attention to the inflection point of the prosperity of the industry.
Everbright Securities Company Limited(601788) Wang Yifeng, chief analyst of the financial industry, said that with the steady progress of the wide credit policy, the “policy bottom” is expected to gradually transmit to the “economic bottom”, the recovery of economic prosperity will also create a stable market environment for banking operation, and the valuation level of the sector will be improved.
(China Securities Journal)
