How to view the current banking business environment? Is the risk of real estate loans controllable? How does the recent stock market fluctuation affect the financial management business? How does Schroeder Bank of communications finance develop in synergy with Bank of communications finance?
On the evening of March 25, Bank Of Communications Co.Ltd(601328) held the 2021 annual performance conference, and the management responded to the above hot issues one by one.
net profit growth reached the highest level in recent 9 years
According to the data, in 2021, Bank Of Communications Co.Ltd(601328) achieved an operating revenue of 269390 billion yuan, a year-on-year increase of 9.42%; The net profit (attributable to the shareholders of the parent company) was 87.581 billion yuan, a year-on-year increase of 11.89%. By the end of 2021, the total assets of the group had reached 11.67 trillion yuan, an increase of 9.05% over the end of the previous year.
The reporter of China Securities Journal noted that the year-on-year growth rate of net profit of BOCOM in 2021 (11.89%) reached the best level in nearly nine years (20132021).
Then, can the performance of BOCOM maintain this momentum in 2022? Liu Jun, President of the Bank of communications, said frankly that the overall situation this year is indeed particularly complex. It is difficult for the Bank of communications to continue to hand over a satisfactory answer to the capital market and investors in 2022, but there are still optimistic factors. For example, macro policies have created a good environment for the rational and stable operation of the economy, with huge policy advantage space, consumption and investment have been gradually repaired and restored, and the export growth trend has not changed, “On the whole, China’s economy is still the stabilizer and main engine of global economic growth this year. If we have such a conclusive judgment, it shows that financial institutions will have great prospects in it.”
In terms of asset quality, by the end of 2021, the balance of non-performing loans of BOCOM was 96.796 billion yuan, with a non-performing loan ratio of 1.48%, a decrease of 902 million yuan and 0.19 percentage points respectively compared with the end of the previous year, and the balance and proportion of overdue loans decreased “both”; The provision coverage rate was 166.50%, an increase of 22.63 percentage points over the end of the previous year.
With regard to the significant increase in the provision coverage of BOCOM in 2021, Lin Hua, chief risk officer of BOCOM, told the reporter of China Securities Journal that in 2021, BOCOM kept the provision provision intensity unchanged on the premise of actively carrying out asset collection and disposal, and the provision coverage has increased for four consecutive quarters, “Judging from this year’s situation, the external economic environment we face is complex and changeable, and there may be more disturbing factors. We attach great importance to asset quality this year, and will further implement risk classification and full provision in management to accurately reflect the actual situation of asset quality. Our provision coverage is expected to remain at a reasonable and appropriate level.”
real estate loan risk controllable
Real estate loans have always been one of the priorities of banking business. Data show that by the end of 2021, the balance of Bank of Communications’ loans to public real estate was 419.8 billion yuan, an increase of 20.57% over the beginning of last year, accounting for 6.4%, an increase of 0.45 percentage points over the beginning of last year.
It is worth noting that on March 16, the financial stability and Development Commission of the State Council held a special meeting and pointed out that with regard to real estate, it is necessary to timely study and put forward effective solutions to prevent and resolve risks, and put forward supporting measures for the transformation to a new development model. In this regard, in the view of the market, looking forward to the future, under the guidance of policies, financial institutions will still strive to meet the normal and reasonable financing needs of real estate enterprises and the reasonable housing consumption needs of consumers.
Hao Cheng, vice president of BOCOM, said, “since the fourth quarter of last year, our real estate loans have increased. In the first two months of this year, the balance of domestic real estate development loans of BOCOM has increased by 29.5 billion yuan, which is equivalent to 7% of the balance of 419.8 billion yuan at the end of last year. At the same time, we have abundant reserves for follow-up projects. Generally speaking, the risk of real estate loans of BOCOM is controllable.”
In terms of real estate M & a financial services, it is reported that since this year, BOCOM has signed 10 billion yuan and 9 billion yuan M & A financing strategic cooperation agreements with Minmetals Real Estate Co., Ltd. and Midea real estate Holding Co., Ltd. respectively. At the same time, BOCOM is negotiating with other high-quality real estate enterprises.
“In the next step, we will give full play to our own advantages and form a joint force with high-quality real estate enterprises in the field of M & a financial services such as M & A loans, M & A bonds, M & A consultants and M & a funds, so as to jointly promote the virtuous circle and healthy development of the real estate industry.” Hao Cheng said.
long term limited products wait for market sentiment to calm down and usher in reversal
Since this year, affected by multiple factors such as the global environment, A-Shares have fluctuated greatly, bank financial products have also been affected, and many bank financial products have fallen below the initial net value. Data show that as of March 25, more than 2000 financial products have been “broken net”.
Tu Hong, business director of BOCOM, said that the products of BOCOM financial management, a subsidiary of the group, have also retreated recently, “However, from the perspective of underlying assets, the vast majority of BOCOM wealth management products are invested in the bond market, and the allocation of equity assets is relatively low. Although short-term returns are affected by market fluctuations, long-term limited products can wait for market sentiment to calm down and usher in a reversal, which has been well verified by our historical performance. Recently, we have been adjusting the product structure, increasing the proportion of low volatility assets, balancing the allocation of industries and stabilizing the net value of products.”
It is worth mentioning that, in addition to bocom wealth management, Bank Of Communications Co.Ltd(601328) currently has a wealth management grandson company Schroder bocom wealth management.
Tu Hong said that Schroder Bank of communications financial management will form a differentiated development with the existing businesses of the two shareholders. In terms of investment positioning, on the basis of direct investment in equity and bonds, it will integrate diversified assets such as fof portfolio, REITs, green diversified assets, alternative and private equity. In terms of product positioning, it is differentiated from the financial product system dominated by low-risk fixed income of BOCOM financial management and the product system dominated by high-risk rights and interests of Schroder domestic companies:
Through the construction of multi asset investment capacity such as equity, alternative and overseas assets, it focuses on medium and high-risk mixed financial products highlighting the concept of multi asset allocation, focusing on the issuance of closed-end products with a minimum holding period of more than 1 year.
Make use of Schroeder ESG’s development experience to create a green theme characteristic product line, and design mixed and equity long-term medium and high-risk financial products covering ESG, sustainable investment, carbon neutralization and other themes.
Give full play to Schroder’s channel advantages in the global market and create Chinese asset investment solutions suitable for overseas customers.
Zhou Wanfu, vice president of BOCOM, judged that the wealth management market is still in the growth stage on the whole, and the bank’s wealth management is still promising.
