Operation of listed banks in 2021: performance maintained high growth and asset quality continued to improve. In 2021, the year-on-year growth rates of operating revenue and net profit attributable to the parent company of 20 A-share listed banks were 8.0% and 13.2% respectively. The year-on-year growth rate of revenue has increased quarter by quarter since 1q21, and the profit growth rate has slowed down slightly but remained high. Specifically:
1) the growth rate of net interest income increased by 0.4pct to 4.7% quarter on quarter, and the growth of interest income was driven by scale expansion. a. “Quantity”: the expansion of asset side is strengthened. In 2021, the year-on-year growth rate of interest bearing assets of listed banks was 8.2%, an increase of 1.1pct compared with the end of the previous quarter, and the expansion of asset side was strengthened. Credit supply shows the characteristics of “more large banks and less small banks”, and retail growth is better than that to the public. Key industries such as inclusive small and micro enterprises and green credit maintain a high growth rate; b. “Price”: the decline in interest rate spread continued to narrow, and some banks stabilized and rebounded. It is estimated that the net interest margin increased by 1bp to 2.01% month on month (MOM) from 1-3q21, showing a stabilizing trend; The interest rate spreads of CCB, BOCOM, Changshu and Jiangyin increased quarter on quarter.
2) non interest income continued its strong performance in the early stage, with a year-on-year growth rate and a quarter on quarter increase. In 2021, the net handling fee and commission income of listed banks increased by 8.8% year-on-year, 0.5pct higher than that of 1-3q21. Net other non interest income increased significantly by 32.4% year-on-year, mainly due to the increase in income from equity instruments and bond investment.
3) the asset quality is further improved, and the capital adequacy ratio is rising steadily. In 2021, the non-performing indicators of listed banks achieved a “double drop”, the provision coverage increased by 7.7pct to 238.6% quarter on quarter, and the risk offset ability was further enhanced.
The real estate credit system has contracted significantly, and the policy shift will strive to ensure the stability of the market. ① The growth rate of mortgage loans slowed down, and development loans showed negative growth in the second half of the year. Since 2021, the growth rate of housing related financing has slowed down quarter by quarter. The year-on-year growth rates of housing mortgage and public real estate loans of listed banks were 10.8% and 3.8% respectively, down 1.1 and 2.3pct respectively compared with 1h21, and the development loan decreased by 0.20 trillion in the second half of 21. ② The non-performing rate of housing related businesses has increased, and the overall risk is controllable. Under the background of shrinking financing channels of real estate enterprises, the cash flow pressure of weak qualified subjects is more prominent, but after the recent meeting of the financial committee, a consensus on stabilizing the real estate market has been reached.
Green credit continues to develop, and state-owned banks play the role of “head geese”. In terms of green credit, listed banks increased their green credit in 2021, and the growth rate of green loans of most banks exceeded 30%. The new green credit of industrial and agricultural construction in China is on a high scale of about 460640 billion, which is mainly used in the fields of green upgrading of infrastructure, clean energy and so on. In terms of green bonds, listed banks continue to promote the issuance of green financial bonds, and assist major institutions at home and abroad to issue green bonds and promote variety innovation through bond underwriting.
Wealth management consolidated the foundation of customer base and deepened the transformation of financial net worth. Listed banks strengthen customer expansion and hierarchical management, guide customers’ multi asset allocation, and pay attention to the construction of wealth management team and financial technology empowerment. In 2021, the growth rate of financial management scale of listed banks increased steadily, the net worth rate of most banks exceeded 90%, and some urban and rural commercial banks have achieved full net worth. By the end of 2021, the scale of China Merchants Bank‘s financial management had reached 2.78 trillion, and the scale of ICBC financial management, CCB financial management, Agricultural Bank of China financial management and Bank of China financial management exceeded 1.5 trillion. Bank financial management companies further improved their product system and paid attention to product innovation.
Bank stock investment logic and suggestions. Since this year, the operation of the banking industry has remained stable, scale expansion will still be an important factor driving the growth of interest income, and the pressure on net interest margin has increased. However, the policy promotes the superposition of debt cost control, which is expected to control Nim in a reasonable range through the effective manipulation of asset burden. 1q22 listed banks’ revenue and profit growth is expected to be “stable and slightly lower”. After the meeting of the Finance Committee on March 16, the trend of the banking sector was strong, and the willingness to increase capital positions in the North was strengthened. Looking forward to April, the “broad credit” is expected to strengthen and gradually enter the cashing period. The continuous performance of the real estate sector under the warm policy will help to enhance the market’s confidence in “stable growth”, and the bank stock market is expected to continue. Two main lines are recommended: 1) Jiangsu and Zhejiang regional high-quality banks with “Pro cycle and high growth”, with emphasis on Nanjing, Changshu, Jiangsu and Bank Of Hangzhou Co.Ltd(600926) ; 2) As the main line of big banks with obvious advantages in credit supply and debt side, Postal Savings Bank Of China Co.Ltd(601658) , it is recommended to pay attention to H-share big banks.
Risk analysis: the economic growth rate is lower than expected; Real estate risk situation disturbance; Financial profit giving entities exceeded expectations.
