On March 24, Industrial Bank Co.Ltd(601166) disclosed an annual performance report that was quite different from previous years.
In the past year, the bank achieved an operating revenue of 221.24 billion yuan, a year-on-year increase of 8.9%; The net profit attributable to the shareholders of the parent company was 82.68 billion yuan, a year-on-year increase of 24.1%.
this is also the sailing year of Industrial Bank Co.Ltd(601166) a new round of five-year plan. In the annual report, the bank outlined the effectiveness of strategy implementation by four indicators: the growth rate of off balance sheet assets of the group is greater than that of on balance sheet assets, the growth rate of green financing is greater than that of corporate financing, the growth rate of non interest income is greater than that of net interest income, and the growth rate of subsidiary revenue is greater than that of parent bank revenue
It is worth noting that Chairman LV Jiajin revealed in his speech in the annual report that after months of brainstorming, the bank began to implement the organizational system reform of the three lines of science and technology, retail and enterprise finance, “increase scientific and technological support with unprecedented strength and promote public-private linkage with unprecedented determination”.
At the same time, the head office leaders were encouraged to set up departmental functions across lines according to the division of strategic functions, and the bank was encouraged to establish various task-based agile organizations. “We are well aware that strategic transformation is a protracted war that cannot wait but cannot be rushed. Focusing on running our own affairs is the fastest path in the long journey.” LV Jiajin said.
According to the profit distribution plan for 2021, Industrial Bank Co.Ltd(601166) plans to pay out 1.035 yuan (including tax) per share, totaling 21.501 billion yuan, with a cash dividend ratio of 27.4%, the highest since listing.
“new five year” has made a good start
According to the plan, the “new five years” Industrial Bank Co.Ltd(601166) will continue to promote the implementation of the “1234” strategy, establish three “golden business cards” of green bank, fortune bank and investment bank, comprehensively promote the digital transformation throughout, and realize the transformation from large-scale bank to value bank.
From the results, the bank has made a good start:
The growth rate outside the balance sheet is greater than that in the balance sheet. The growth rate of off balance sheet corporate financing balance (21.9%) was faster than that of on balance sheet corporate financing balance (8.6%); The growth rate of off balance sheet retail wealth management (17.5%) was 8.4 percentage points higher than that of on balance sheet retail deposits.
Second, the growth rate of green financing balance is greater than that of corporate financing balance. The balance of full caliber green financing increased by nearly 20% in the whole year, 4.5 percentage points faster than the growth rate of the group’s corporate financing balance (FPA). Among them, the growth rate of green loans was as high as 42%.
Third, the growth rate of non interest net income is greater than that of interest net income. The annual non interest income increased by 26.7% year-on-year to 75.56 billion yuan, accounting for 34.2% of the operating income, an increase of 4.8 percentage points year-on-year. The dependence of revenue growth on capital consumption business continues to decline.
Fourth, the revenue growth of subsidiaries is greater than that of the parent bank. The revenue of subsidiaries increased by 25.5% year-on-year, 17.5 percentage points higher than that of the parent bank, and contributed more than 10% to the revenue of the whole bank.
While optimizing the asset structure and income structure, Industrial Bank Co.Ltd(601166) customer structure has also been improved. At the end of last year, the number of corporate customers of the bank exceeded 1 million and retail customers approached 80 million, of which the proportion of public value customers rose to 41.2%, and the growth rate of retail VIP customers and private customers was higher than the overall growth rate of retail customers.
“With the synchronous improvement of customer scale and quality, the big articles of optimizing on balance sheet and expanding off balance sheet are gradually plump, the business structure is continuously optimized, and greater steps are taken in the development of light capital, light assets and high quality.” President Tao Yiping said in his speech.
at the same time, “we regard digital transformation as a battle of life and death, which runs through all aspects of strategic transformation.” In 2021, Industrial Bank Co.Ltd(601166) science and technology investment reached 6.36 billion yuan, with a year-on-year increase of 30.9%, accounting for 2.88% of operating revenue; The number of scientific and technological personnel doubled, and the proportion of scientific and technological personnel in the whole bank reached 6.45% at the end of the year
According to the data, by the end of last year, Industrial Bank Co.Ltd(601166) assets totaled 8.6 trillion yuan, an increase of nearly 9% over the beginning of the year, of which the proportion of loans in total assets rose to 51.5%, and the proportion of non mortgage retail loans further increased.
On the liability side, in the fourth quarter of last year, the bank’s deposit increment exceeded 100 billion, the highest in nearly six quarters. Among them, the demand deposit certificate increased by 166 billion yuan in the quarter, driving the proportion of demand deposits across the bank to rise to more than 41%, an increase of 1.1 percentage points over the beginning of the year, and the overall deposit cost decreased by 4 bp to 2.22%.
Industrial Bank Co.Ltd(601166) said that in 2022, it will expand collection, payment and distribution businesses by building scenarios, platforms and operations, and drive the precipitation of low-cost liabilities through more settlement.
“three business cards” score
Industrial Bank Co.Ltd(601166) strive to polish the “three business cards”, and “green bank” is listed as the first one. In fact, as China’s first “equator bank”, Industrial Bank Co.Ltd(601166) took the lead in developing green finance business as early as 2006.
According to the bank’s plan, each branch and subsidiary should become the leader of green finance in its location and industry. By the end of 2025, the balance of green financing of the whole bank will exceed 2 trillion yuan and the number of customers will exceed 50000.
from the results of the first year, at the end of last year, Industrial Bank Co.Ltd(601166) green finance customers reached 38000 and the balance of green financing was 1.39 trillion yuan, an increase of about 27% and 20% respectively over the beginning of the year, of which the balance of green loans was 453.94 billion yuan, accounting for more than 10% of the total loans, ranking first in the joint-stock bank
In terms of wealth bank, the bank’s retail AUM (managed customer assets) reached 2.85 trillion yuan at the end of last year, an increase of 9% over the beginning of the year. In the whole year, the scale of wealth sales exceeded 5 trillion, and the income of wealth bank reached 23.39 billion yuan through financial management, agent sales, asset custody, trust and fund subsidiaries, a year-on-year increase of 13.2%.
Among them, xingyin financial management, as the core of “commercial banks + investment banks”, managed a balance of 1.79 trillion yuan of financial products at the end of the year, an increase of 21% over the beginning of the year, and 94% of the products in line with the requirements of the new regulations on asset management. In 2021, the operating income and net profit of xingyin financial management will double.
it is worth noting that, in addition to traditional channels, the bank also sold 667.6 billion yuan of financial products to retail customers of 65 state-owned banks, joint-stock banks, regional banks and rural financial institutions through “wealth cloud”, a year-on-year increase of nearly 430%
In 2021, Industrial Bank Co.Ltd(601166) was also approved to establish the first private banking franchise of joint-stock banks. Taking this opportunity, the bank’s sales of private placement products and family trust business grew rapidly, and the ownership of private securities products, private equity products, family trust and discretionary business doubled.
By the end of last year, the number of private bank customers of the bank had reached 58000 and the Aum of private bank was nearly 750 billion yuan, an increase of 20% and 17.2% respectively over the beginning of the year.
According to the Chinese reporter of the securities firm, Industrial Bank Co.Ltd(601166) will also strive to achieve a breakthrough in the whole channel consignment of large state-owned banks in 2022, and ensure that the scale of wealth management and financial management subsidiaries will increase by 30%.
In terms of investment banking, the bank continued to maintain the increment of off balance sheet non-traditional FPA and the growth rate exceeded that of on balance sheet financing. At the end of last year, Industrial Bank Co.Ltd(601166) off balance sheet non-traditional FPA reached 2.71 trillion yuan, with the stock accounting for 38.7% and the increment accounting for 72.9%.
At the same time, the bank continued to build an “investment + investment banking” ecosystem through external cooperation: on the one hand, the circle of friends of “xingcaizi” including “shares, bonds, loans and transfers” was expanded to 150, and the annual asset turnover scale was 331.6 billion yuan, a year-on-year increase of 47.4%; On the other hand, there are 96 cooperative institutions of equity investment “investment joint loan”, gradually opening up the space for equity investment.
the rapid development of investment banking business has also provided 115.6 billion yuan of high-quality assets for the wealth management sector. In addition, after a lapse of five years, the bank restarted the establishment of xingyin international at the end of October 2021, and this overseas investment banking license was also highly expected by the whole bank
first disclosure of “housing related” business risk ledger
In the annual report of 2021, Industrial Bank Co.Ltd(601166) also separately disclosed the risk “account book” of real estate business and local financing platform business for the first time
In terms of real estate business, at the end of last year, the bank invested 1.65 trillion yuan in real estate under domestic self operated loans, bonds, non-standard and other businesses, with a non-performing rate of 1.34%. Of which:
1. The personal real estate mortgage loan is about 1.12 trillion yuan, accounting for 67.8%. The balance distributed in the first and second tier cities accounts for more than 70%. The other mortgage projects are concentrated in the main urban areas of the Pearl River Delta, Yangtze River Delta and some economically developed cities in the central region;
2. The balance of corporate financing business with high-quality developers and high-quality projects as the main financing objects was 532.09 billion yuan, accounting for 32.2%. In addition to the bond investment of more than 80 billion yuan, the remaining 447.7 billion yuan has corresponding real estate projects and mortgages, and the balance of the projects accounts for 52% in the first tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, and 37% in the provincial capital cities and cities with developed economy and stable real estate market with GDP of more than trillion yuan;
3. Off balance sheet businesses that do not bear credit risk amount to 130.05 billion yuan, including 55.8 billion yuan of bond underwriting, 47.2 billion yuan of financial capital investment and 27.1 billion yuan of financial consignment business, and all assets under financial management are normal.
In terms of local government business, at the end of last year, the debt balance of the bank’s full caliber local government financing platform was about 307715 billion yuan, down nearly 70 billion yuan from the beginning of the year. Among them, the debt non-performing asset ratio of local government financing platforms is 1.97%, and the scale of non-performing assets is about 6.06 billion yuan.
According to the data, in 2021, the quality of Industrial Bank Co.Ltd(601166) overall assets continued to improve, and the non-performing loan ratio fell to 1.1% at the end of the year, the best level in recent seven years. The provision coverage rate increased by 50 percentage points over the beginning of the year to nearly 270%, and the risk defense capability continued to be enhanced.
However, the proportion of concerned loans and overdue loans increased.
In this regard, Industrial Bank Co.Ltd(601166) explained that, on the one hand, in the fourth quarter, the bank strictly enforced the recognition standard of overdue credit card loans according to the regulatory requirements. The time point of overdue recognition was earlier than the original rules, adding some overdue and concerned loans, but most of them were temporary overdue. After the reminder of collection, customers can repay the loans without further migration to non-performing loans.
On the other hand, after the expiration of the protection period of the policy on deferred repayment of principal and interest, some customers were unable to restore their normal operation and repayment ability, and the epidemic relief policy withdrew, resulting in the increase of some overdue and concerned loans. In addition, a small number of real estate enterprises have increased their defaults due to poor management or lack of integrity, and increased some overdue and concerned loans.
