In not too distant memory, banks used to be "animals of scale". In recent years, the dependence of the economy on investment has decreased, and the loan growth rate has fallen and stabilized Bank Of China Limited(601988) although the expansion speed of the banking industry is slowing down, some banks are still in a state of high expansion. The average year-on-year growth rate of interest bearing assets of 21q3 listed banks is only 8.5%, but there are still five banks with a growth rate of around 20%.
Local credit risk events lead to the trend of regional differentiation of credit. The accumulation of credit accelerated to six regions including Jiangsu, Zhejiang, Shandong, Sichuan and Hunan. The proportion of social finance increment in 2021 increased by 0.3pct-3.3pct compared with the cumulative proportion in the past eight years. The market share of regional bank loans is also increasing. 21q3 joint-stock banks decreased by 0.57pct, while urban rural commercial banks increased by 0.24pct. Select 13 representative listed banks as the portfolio of "high expansion urban rural commercial banks".
Scale expansion determines the basic performance, and report cleanliness determines the upper performance limit. The revenue growth rate of these 13 banks is relatively high, but the profit growth rate is affected by different provision provisions, resulting in high and low differentiation. Therefore, "high expansion" provides the basic sector for high performance growth, while "clean statement" can make less provision, drag down the release of performance, and even feed back profits.
"Circular Demonstration" between high expansion and high performance. In order to ensure the continuation of high expansion, banks need to ensure that the core tier 1 capital adequacy ratio meets the standard and is stable. Higher profit growth can not only directly retain profits to supplement capital, but also boost roe and raise expectations, making the process of fixed increase or share conversion smooth. In order to achieve higher profit growth, revenue growth should also be high, so it is necessary to maintain high expansion, and a logical closed loop has been formed since then.
It can be compared horizontally from four dimensions: performance, report cleanliness, capital shortage and stock conversion rhythm. On the whole, high expansion, clean statement, lack of capital and urgent stock conversion will usually lead to the release of high performance.
Investment suggestion: high expansion + clean table ≈ high performance
1) credit has accumulated in 6 regions including Jiangsu, Zhejiang, Shandong, Sichuan and Hunan, prompting the high-end expansion of local urban rural commercial banks. 2) High expansion accelerates capital consumption, which requires the release of endogenous supplements with high performance and the conversion of convertible bonds into shares, so as to maintain the high expansion trend and constitute a logical "Circular Demonstration". 3) Therefore, high expansion + clean table will probably have high performance. Suggestions for attention: Bank Of Chengdu Co.Ltd(601838) , Bank Of Nanjing Co.Ltd(601009) , Bank Of Hangzhou Co.Ltd(600926) , Bank Of Jiangsu Co.Ltd(600919) Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) 。
Risk warning: intensified horizontal competition; The evaluation method has limitations; Deterioration of regional asset quality; The impact of the epidemic has put pressure on the economy.
