Core view
The growth rate of revenue increased and the performance was stable. As of April 1, a total of 23 listed banks had issued annual reports for 2021. From the perspective of profit performance, the profit growth rate of listed banks in the fourth quarter of 21 years continued to maintain a high level, and the net profit attributable to the parent company in the whole year of 21 years increased by 13.2% (vs14.0%, 21q1-3) year-on-year.
Provision is still the main positive contribution. From the perspective of the decomposition of various factors driven by the growth of net profit, the net profit contributed by the provision of listed banks increased by 8.9 percentage points in 2021, and the back feeding of the provision to the profit continued after the bad stock was cleared; The negative profit margin is 0.5 percentage points; The scale contribution is stable, with a positive contribution of 5.6 percentage points to profits, reflecting the effect of the steady credit policy in the fourth quarter; Zhongshou and other non interest rates maintained good growth, contributing 2.4 and 5.0 percentage points to the profits of listed banks respectively.
Driven by credit, the speed of asset expansion has increased. The growth rate of listed banks in 21q4 was significantly higher than that in 21q3. The balance of interest bearing assets increased by 8.0% (vs7.2%, 21q3) year-on-year, of which loans increased by 11.5% (vs10.8%, 21q3), which was consistent with the trend of repairing the growth rate of financial data in the fourth quarter and reflected the effect of stabilizing credit policies. In terms of liabilities, the marginal pressure of 21q4 deposits has slowed down, and the deposit growth rate of 23 listed banks has increased by 1 percentage point compared with 21q3. We expect that it is related to the increase of deposit derivatives brought about by the recovery of credit business to a certain extent.
There is still downward pressure on the asset side, and the interest rate spread continues to narrow. We calculated the annual net interest margin of 23 listed banks at the end of the initial period to be 2.07%, a decrease of 1bps compared with the first half of the year. The narrowing of the industrial interest margin is still dragged down by the decline of the return on the asset side, and the cost rate on the liability side remains stable as a whole. Looking forward to the downward pressure of the economy in 2022, we expect that the loan yield is still in the downward channel, but we believe that the industry can still maintain a certain resilience of the annual net interest margin through the optimization of asset negative structure. It is expected that the net interest margin performance of the industry in 2022 will remain stable compared with that in 2021.
Non performing assets remained stable, and attention was paid to the trend and change of asset quality in the future. The non-performing ratio of 23 listed banks at the end of the year 21 decreased by 5bp to 1.34% quarter on quarter compared with 21q4. We observed that the marginal pressure of non-performing generation of some joint-stock banks and regional banks increased, and the relevant forward-looking indicators increased. By reviewing the asset quality performance of banks at the beginning of the epidemic in 20 years, we found that the credit risk of the industry was exposed under the epidemic. As of 20h1, the overall non-performing rate of listed banks increased by 5bp to 1.47% compared with that at the end of 19, among which the non-performing rate of retail consumer loans and corporate loans represented by wholesale and retail, accommodation and catering and tourism increased most significantly. Looking forward to the follow-up, the impact of the short-term epidemic may bring negative disturbance to the asset quality of the industry, but at the current time point, we believe that the asset quality performance of banks still has enough support. On the one hand, the overall bad burden of the industry has been fully resolved in the past 3-4 years; On the other hand, the goal of steady growth is clear, and there is still room for future policies to support the economy and protect bank operations; In addition, over the past 20 years, the industry has increased the provision provision, and the thicker provision level makes the listed banks have good risk tolerance. On the whole, we expect the asset quality performance of the bank to remain stable in 2022.
Investment proposal and investment object
Combined with the annual reports of 23 listed banks that have been released, the business performance of the industry continues to maintain a stable and positive trend. At present, the static Pb valuation level of the sector is only 0.64x, at a historical low, which fully reflects the negative expectations of the industry under the disturbance of the market to the epidemic and the downward pressure of the economy. Considering the clear goal of steady growth, more supporting policies are expected to continue to work to improve economic expectations and provide effective support for the fundamental operation of banks. It is suggested to pay attention to the valuation repair opportunities brought by the “correction” of overly pessimistic market expectations and continue to maintain the “optimistic” rating of the industry.
In terms of individual stocks, it is suggested to pay attention to: 1) value targets with excellent historical profitability and leading asset quality represented by China Merchants Bank Co.Ltd(600036) ( China Merchants Bank Co.Ltd(600036) , Unrated) and Bank Of Ningbo Co.Ltd(002142) ( Bank Of Ningbo Co.Ltd(002142) , Unrated); 2) Undervalued targets represented by Bank Of Communications Co.Ltd(601328) ( Bank Of Communications Co.Ltd(601328) , Unrated), Industrial Bank Co.Ltd(601166) ( Industrial Bank Co.Ltd(601166) , Unrated), Postal Savings Bank Of China Co.Ltd(601658) ( Postal Savings Bank Of China Co.Ltd(601658) , Unrated); 3) Urban rural commercial banks with strong regional economic advantages represented by Shanghai Rural Commercial Bank Co.Ltd(601825) ( Shanghai Rural Commercial Bank Co.Ltd(601825) , not rated), Bank Of Chengdu Co.Ltd(601838) ( Bank Of Chengdu Co.Ltd(601838) , not rated), Bank Of Nanjing Co.Ltd(601009) ( Bank Of Nanjing Co.Ltd(601009) , not rated).
Risk tips
The economic downturn exceeded expectations, resulting in higher than expected pressure on the asset quality of the industry.
The liquidity risk of real estate enterprises continues to spread, disturbing the asset quality of banks.
The duration and coverage of the epidemic exceeded expectations.
