Focus:
1) on April 13, the national Standing Committee proposed to encourage large banks with high provision level to reduce the provision rate in an orderly manner and timely use monetary policy tools such as RRR reduction; On April 15, the central bank decided to cut the deposit reserve ratio of financial institutions by 0.25 PCT on April 25, and cut an additional 0.25 PCT for urban commercial banks without inter provincial operation and rural commercial banks with deposit reserve ratio higher than 5%.
2) on April 14, the central bank held a conference on financial statistics for the first quarter. On April 15, the China Banking and Insurance Regulatory Commission answered reporters’ questions on the operation and development of the banking and insurance industry in the first quarter. In the first quarter, the total assets of the banking industry were 351.1 trillion yuan, a year-on-year increase of + 8.9%, of which loans were + 11% and deposits were + 9.3% year-on-year.
Industry and company dynamics
1) on April 11, the central bank released the financial and social finance data of March. The total amount of credit exceeded expectations and the structure was still poor. 2) This week China Minsheng Banking Corp.Ltd(600016) completed the issuance of 20 billion yuan of financial bonds Bank Of Jiangsu Co.Ltd(600919) 2021a operating revenue increased by 22.58% year on year, and net profit attributable to parent company increased by 30.72% year on year Bank Of Hangzhou Co.Ltd(600926) 2021a operating income + 18.36% year on year, net profit attributable to parent company + 29.77% year on year Bank Of Nanjing Co.Ltd(601009) 2021a operating revenue + 18.74%, net profit attributable to parent company + 21.04%, 1q22 operating revenue + 20.39% and net profit attributable to parent company + 22.33% year on year. 3) Next week, Bank Of Shanghai Co.Ltd(601229) plans to disclose the annual report, and Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , Changshu, China Merchants Bank Co.Ltd(600036) plans to disclose the first quarterly report.
Data tracking
This week, the A-share bank index fell by 0.20%, outperforming the CSI 300 index by 0.79 percentage points, and the rise and fall of the sector ranked 8 / 30, among which Bank Of Chengdu Co.Ltd(601838) (+ 5.89%), Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) (+ 3.91%) and Bank Of Nanjing Co.Ltd(601009) (+ 2.85%) were the top gainers.
Open market operation: this week, the central bank conducted a total of 60 billion yuan of reverse repo in the open market, a total of 40 billion yuan of reverse repo expired, another 70 billion yuan of Treasury fixed deposit expired, and the central bank invested 150 billion yuan of MLF to hedge the maturity, and the interest rate was flat in the previous period. Therefore, the central bank’s total net withdrawal from the open market this week was 50 billion yuan. 60 billion yuan of reverse repo will expire next week.
Shibor: this week, the trend of Bank Of Shanghai Co.Ltd(601229) inter-bank lending rate declined as a whole. The overnight Shibor interest rate fell 41bp to 1.34%, and the seven-day Shibor interest rate fell 17bp to 1.82%.
Investment suggestions:
This week, following the disclosure of financial data in March, the expectation of RRR reduction was released from the national standing committee to the central bank’s implementation of comprehensive + targeted RRR reduction. Although the range is generally gentle and less than the market expectation, it is encouraged to reduce the upper limit of deposit interest rate in combination with the industry level, which is conducive to the improvement of bank debt cost and the reduction of provision rate, so as to strengthen financial supply and stimulate demand repair; Superposition of fiscal policy coordination and overweight of steady growth policy are expected to stabilize market expectations and hedge the impact of multiple epidemics and other factors on the economy. At present, wide credit will still focus on small and micro enterprises and structural industries and fields such as consumption and people’s livelihood with great impact of the epidemic. At present, the valuation of the sector fully reflects the pessimistic expectations of the market, and the dividend yield is at a high level. We maintain the “recommended” rating of the sector, and continue to recommend at the individual stock level: China Merchants, Ningbo, Chengdu, Hangzhou, Ping An, Societe Generale, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) etc.
Risk tips:
1) the downward pressure on the economy continues to increase, and the credit cost has increased significantly;
