\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
Event overview
Bank Of Ningbo Co.Ltd(002142) release the annual report: in 2021, the operating revenue was 52.77 billion yuan (+ 28.37%, YoY), the operating profit was 20.48 billion yuan (+ 24.11%, YoY), and the net profit attributable to the parent company was 19.546 billion yuan (+ 29.87%, YoY); At the end of 2021, the total assets were 2.02 trillion yuan (+ 23.90%, yoy; + 5.66%, QoQ), deposits were 1.05 trillion yuan (+ 13.80%, yoy; + 0.47%, QoQ), and loans were 862709 billion yuan (+ 25.45%, yoy; + 3.14%, QoQ). Retail aum6562 billion yuan (+ 23%, YoY). Net interest margin 2.21% (-9bp, YoY); The non-performing rate is 0.77% (- 1bp, QoQ), and the provision coverage rate is 525.52% (+ 10.22pct, QoQ); Annual roe16 63%(+1.73pct，YoY)。 The proposed cash dividend is 0.5 yuan / share, and the disclosed dividend rate is 17.57%.
Analysis and judgment:
Non interest high growth, strong performance and rapid development of wealth business
Bank Of Ningbo Co.Ltd(002142) 2021 continued its high growth performance, achieving revenue and PPOP growth rates of + 28.4% / + 30.5% respectively, significantly higher than that in 2020, and steadily increased month on month compared with the first three quarters, with a year-on-year increase of + 28.1% / + 37.9% in Q4. The beautiful revenue performance benefited from the construction of multiple profit centers and the cultivation of multiple business growth points. On the one hand, the net interest income increased by 17.4% year-on-year, and the rate of asset expansion increased steadily in the fourth quarter. The growth rate of net interest income in a single quarter rebounded 5pct to 16% compared with Q3; On the other hand, the net fee income and other non Commission transaction income contributed to the high growth rate of + 30% / + 71%, and the growth rate of the net commission income in a single quarter with a low base exceeded 150%, mainly from the agency business, which accounted for more than 80% of the medium income, with a year-on-year increase of + 33%. The corresponding wealth management business is developing rapidly. Through the introduction of head Cooperation Organization + online wealth open platform and the improvement of asset allocation system, the company disclosed that the scale of non commodity basic insurance is 87 billion, ranking first among urban commercial banks. The company achieved a 23% increase in retail AUM in 2021, of which the number of private customers increased by 70% year-on-year to 13000, corresponding to an increase of 53% in AUM. The establishment and improvement of wealth management system will become a new engine for medium and long-term performance development.
Although the company’s impairment provision increased by 43% year-on-year in 2021, it has strong revenue traction. At the same time, the cost income ratio is also lower than the high level in 2020. With the addition of overweight government bonds and thickened tax deduction, the income tax was – 36.6% year-on-year, and the overall profit release was accelerated. The annual net profit attributable to the parent company was + 30% year-on-year. Among them, the growth rate of Q4 single quarter net profit increased slightly, mainly due to the marginal convergence of the increase in impairment provision. Roe under the rapid growth of performance increased by 1.73pct to a high level of 16.6% year-on-year.
The scale of assets has been raised to a higher level, and the allotment of shares has been completed to ensure high growth
In 2021, the total assets of the company increased by 23.9% year-on-year to 2.02 trillion yuan, breaking through 2 trillion yuan for the first time, and the scale reached a new level. Loans, investment assets and interbank assets were + 25.4% / + 24.6% / + 105.5% year-on-year respectively. The pace of Q4 loans slowed down slightly, but the proportion of overall book loans in total assets increased by 0.5pct to 41.3% compared with the beginning of the year. In terms of loan structure, public and retail loans were + 25.6% / + 27.3% respectively, and bills increased by only 15.9%. In terms of marginal rhythm, the speed of public loans increased in 2021, and 70% of the loan increment in the fourth quarter was invested in public. The scale of bills also decreased month on month, benefiting from the strong financing demand under the repair of regional economy, which also reflects the company’s strong asset acquisition ability. After the significant expansion of the team in 2020, at present Bank Of Ningbo Co.Ltd(002142) has 320 small and micro service teams with a total number of 2774 people, and the corresponding growth rate of Pratt & Whitney small and micro loans has reached 35%. Retail loans continued to develop across the board. Consumer loans, business loans and mortgages were + 27.3% / + 23.2% / + 26.6% year-on-year respectively. However, the growth rate of mortgages returned to a stable level compared with the high growth in the previous two years. The scale of business loans fell slightly in the second half of the year, or because the credit demand of small and micro business owners was affected by the impact of the economy and the epidemic. In addition, the rapid growth of investment assets was mainly due to the allocation of debt assets dominated by treasury bonds, with a year-on-year increase of 47%.
The liability side was driven by active liabilities. Deposits, bonds and interbank liabilities were + 13.8% / + 21.6% / + 19.9% year-on-year respectively. There was a certain pressure to attract deposits, including the decline in the annual scale of corporate demand deposits and personal time deposits, and the scale of corporate and personal demand deposits decreased significantly in the second half of the year.
Therefore, although the deposit cost rate decreased by 3bp to 1.83% year-on-year, which is better than that of comparable peers, the overall interest payment cost rate decreased by only 1bp year-on-year under the investment of additional active debt supporting assets, and the interest payment cost rate calculated by US rose as a whole during the year; Under the additional allocation of small and micro profit giving entities, the yield fell more, which was the main factor dragging down the decline of interest margin, but the optimization of asset structure formed a hedge. The overall net interest margin decreased by 9bp year-on-year to 2.21%, down 8bp from the first three quarters. Looking forward to 2022, the annual report said that “strive to keep the net interest rate unchanged from that in 2021”. When the asset side yield is expected to continue to decline, the focus includes promoting retail strategy, improving risk pricing, strengthening core liabilities on the liability side, collecting settlement deposits, etc.
Worry free asset quality, high provision and high safety margin
As a bank with the first tier of asset quality, the non-performing rate at the end of Bank Of Ningbo Co.Ltd(002142) 2021 was 0.77%, down by 2bp month on month. The corporate non-performing rate has dropped to 0.47%, of which the loan scale of the real estate industry is small and the non-performing rate has dropped to 0.93%; The main reason is that the non-performing rate of personal loans has risen, rising 35bp and 18bp to 1.24% respectively compared with the beginning and middle of the year. Among the leading indicators, the proportion of attention category is only 0.48%. Although it is 10bp higher than Q3, it is still lower than the end of last year and the absolute level is low; The overdue rate at the end of the year was only 0.76%, which was 8bp lower than that in the medium term. From the perspective of recognition, at the end of the year, the overdue 90 + / non-performing was only 71%, and the overdue / non-performing fell to 98.5% for the first time. After a slight rise in the medium term, they all fell back again, and the recognition of non-performing was more cautious. We estimate that the non-performing generation rate of adding back write off is only 0.72% in the whole year, which is another 7bp lower than that in 2020. The provision for write off was strengthened in the second half of the year, and the generation rate increased slightly month on month.
At the end of the year, the loan allocation ratio and coverage ratio reached 4.03% and 525.52%, which were flat Q3 and increased by 10PCT respectively. The year-on-year provision for impairment was increased, mainly due to the increased provision for the impairment of bond investments, and the loan credit cost rate decreased slightly year-on-year.
Investment advice
Bank Of Ningbo Co.Ltd(002142) as the benchmark of regional urban commercial banks, the performance has increased as scheduled. On the one hand, the formation of wealth management business model will drive the medium income of agency class to increase significantly, and the contribution of the construction of diversified profit center to the revenue will continue to appear in the future; On the other hand, regional advantages enable strong investment on the asset side, superimpose and optimize the structure, ensure the stability of interest collection business, and further enrich the core capital after the completion of share allotment, which will also support high growth in the future. In terms of asset quality, it has low non-performing assets, high provision and strong risk offset ability. At present, the adjustment of the company’s management and the achievement of wealth strategy will further catalyze the space for valuation repair.
In view of the performance of the annual report, we slightly adjusted the forecast of the company’s revenue of 55.6/65.9 / – billion yuan in 22-24 years to 60.5/70.4/82 billion yuan, and the forecast of net profit attributable to the parent company of 20.4 / – billion yuan in 22-24 years to 23.5/28.3/34.1 billion yuan, with a corresponding growth rate of 20.1% / 20.4% / 20.6%; 22-24 years Eps3 The forecast of 26 / 3.99 / – yuan is 3.44/4.17/5.05 yuan, corresponding to the closing price of 38.75 yuan / share on April 7, 2022, and Pb is 1.67/1.46/1.26 times respectively, maintaining the “buy” rating of the company.
Risk tips
1. The risk that the future repair of the overall economy is less than expected and the credit cost increases significantly;
2. Major business risks of the company.
