\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
Event:
On April 7, Bank Of Ningbo Co.Ltd(002142) released the annual report for 2021, which realized an operating revenue of 52.774 billion in 2021, with a year-on-year increase of 28.4%; The net profit attributable to the parent company was 19.546 billion yuan, a year-on-year increase of 29.9%. The weighted average return on net assets was 16.63%, an increase of 1.73 percentage points year-on-year.
Comments:
Build a diversified profit center and maintain a high level of revenue and profit growth
Bank Of Ningbo Co.Ltd(002142) is committed to building a diversified profit center. At present, 12 profit centers have been formed in the banking sector, including corporate banking, retail companies, wealth management, private banking, personal credit, remote banking, credit card, investment banking, asset custody, bill business, financial market and asset management. In terms of subsidiaries, three profit centers have been formed: YONGYING fund, YONGYING leasing and ningyin wealth management. In the company’s profit composition, the profit proportion of large retail and light capital business has been increasing. By the end of 2021, non interest income accounted for 38.04% of the revenue, including 15.66% of the commission income.
In 2021, the year-on-year growth rates of revenue, net profit before provision and net profit attributable to parent company were 28.4%, 30.7% and 29.9% respectively. The growth rates were – 0.1pct, 2.0pct and 2.9pct respectively compared with 1-3q. The quarter on quarter growth rate of revenue remained high and stable, and the profit growth rate increased quarter by quarter since the end of 2020. In terms of the year-on-year growth of net profit, the positive contribution of scale expansion and non interest income was further strengthened, the negative drag of net interest margin was expanded compared with 1-3q21, and the negative drag of operating expenses and provisions was narrowed.
The asset side maintained a strong expansion trend, and the net interest income increased by 17.4% year-on-year
Bank Of Ningbo Co.Ltd(002142) deeply cultivate high-quality areas such as Jiangsu and Zhejiang, with strong regional economic vitality and strong credit demand. In 2021, the net interest income increased by 17.4% year-on-year to 32.697 billion yuan, and the scale of the main beneficiary assets increased rapidly.
The growth momentum on the asset side was strong, and the proportion of credit remained at about 44%. At the end of 2021, Bank Of Ningbo Co.Ltd(002142) total assets, interest bearing assets and loans increased by 23.9%, 25.7% and 25.4% year-on-year respectively, with growth rates of 0.2pct, 0.9pct and – 2.2pct respectively compared with the end of 3q. At the end of 2021, loans accounted for 43.7% of interest bearing assets, and the proportion has been basically stable at about 44% since 2021. At the end of 2021, personal and corporate loans increased by 27.3% and 25.6% year-on-year respectively, with quarter on quarter changes of – 12.3pct and 2.8pct. In the whole year, 174994 billion yuan of new loans were added, and the ratio of public to retail was approximately 9:7; Among them, the new loan of 4q was 26.298 billion yuan, and the ratio of public to retail was about 2:1. By the end of 2021, corporate credit was mainly invested in leasing and business services (accounting for 17.03%), manufacturing (accounting for 15.92%) and commercial trade (9.64%), and more than 90% of corporate customers were small and micro enterprises and private enterprises.
Deposits maintained steady growth. At the end of 2021, the year-on-year growth rates of Bank Of Ningbo Co.Ltd(002142) total liabilities, interest bearing liabilities and deposits were 23.7%, 25.8% and 13.8% respectively, with quarter on quarter changes of -0.7pct, 0.3pct and 0.7pct. Bonds payable increased year-on-year (YoY + 104.0%), and the proportion of deposits in interest bearing liabilities decreased by 3.0pct to 59.7% quarter on quarter.
The net interest margin narrowed 8bp quarter on quarter to 2.21% Bank Of Ningbo Co.Ltd(002142) in 2021, the net interest margin was 2.21%, with a quarter on quarter decrease of 8bp and a year-on-year decrease of 9bp. The yield on interest bearing assets decreased 9bp to 4.59% year-on-year, which was mainly dragged down by the decline of loan yield; The cost ratio of interest bearing liabilities decreased slightly by 1bp to 2.13% year-on-year, of which the cost ratio of deposits decreased by 3bp to 1.83% year-on-year, Bank Of Ningbo Co.Ltd(002142) by strengthening interest rate research and judgment, deposit classification management, assessment and guidance, etc. According to the disclosure of the annual report, Bank Of Ningbo Co.Ltd(002142) predicts that the net interest margin will continue to be under pressure in 2022. The company will respond by optimizing the asset structure, improving the risk pricing ability, strengthening the debt cost control and other measures, and strive to maintain the interest margin at the same level as that in 2021.
Non interest income increased by 51.5% year-on-year, and the transformation of wealth management business improved the contribution of agency business income
Bank Of Ningbo Co.Ltd(002142) in 2021, the non interest income increased by 51.5% year-on-year to 20.077 billion, accounting for 38.04% of the revenue. Among them, the net income from handling fees and commissions increased by 30.3% year-on-year to 8.262 billion yuan, and the net other non interest income increased significantly by 71.0% year-on-year to 11.815 billion yuan.
The growth of handling fee and commission income was mainly boosted by the high growth of agency business. In 2021, the revenue of agency business was 7.839 billion yuan, an increase of 1.949 billion yuan year-on-year, yoy + 33.09% Bank Of Ningbo Co.Ltd(002142) since 2018, we have actively promoted the transformation of wealth business. Focusing on the allocation of large categories of assets, we have gradually formed a full range of product lines in the product system, including cash, fixed income, hybrid, security, equity and linkage. The contribution proportion of fund, insurance and other consignment products has been increasing. At the same time, private banks accelerated their start (in 2021, the number of private bank customers increased by 70% year-on-year to nearly 13000, and the Aum of private banks increased by 53% year-on-year to 146.4 billion yuan), further consolidating the foundation of great wealth.
The non-performing loan ratio decreased quarter on quarter, and the provision coverage ratio rose to 525.52%
Bank Of Ningbo Co.Ltd(002142) take “risk control is cost reduction” as the concept, and solidly implement various risk management requirements. By the end of 2021, the non-performing rate had slightly decreased by 1 bp quarter on quarter to 0.77%, and has remained stable below 0.8% since the end of 2018, which is a low level for listed banks. In terms of non-performing related indicators, the concern rate increased by 10bp to 0.48% quarter on quarter, but the proportion of concerned loans and loans overdue for more than 90 days decreased by 0.02pct, 0.12pct to 0.48% and 0.54% respectively compared with the end of the previous year. The provision coverage increased by 10.22pct quarter on quarter to 525.52%, and the provision thickness continued to be at the leading level in the industry.
Capital replenishment was promoted in an orderly manner, and the overall capital adequacy ratio increased steadily
In 2021, Bank Of Ningbo Co.Ltd(002142) allotment raised nearly 11.9 billion yuan and issued 9.5 billion yuan of secondary capital bonds, which effectively replenished the capital. By the end of 2021, Bank Of Ningbo Co.Ltd(002142) core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 10.16%, 11.29% and 15.44% respectively, with quarterly growth of 0.77pct, 0.71pct and 0.52pct respectively.
Earnings forecast, valuation and rating Bank Of Ningbo Co.Ltd(002142) continues to implement the business strategy of “big banks can’t do well, small banks can’t do it”. In recent years, the growth rate of revenue and profit has been strong. The company has deeply cultivated high-quality business areas such as Jiangsu, Zhejiang and Shanghai, and has a relatively perfect corporate governance structure. The capital replenishment plan was advanced in an orderly manner to further consolidate the momentum of asset side growth in the future. In combination with the business situation in 2021, the EPS forecast for 202223 was raised to 3.62 yuan (up + 0.8%) / 4.37 yuan (up + 2.1%), and the EPS forecast for 2024 was increased to 5.21 yuan, maintaining the “buy” rating.
Risk tip: if the economic impact of the epidemic on the Yangtze River Delta exceeds expectations, it may drag down the company’s effective credit demand.
