Since the beginning of the year, listed banks have successively disclosed the performance express of 2021. Good news has spread frequently, and the performance growth rate of many banks has reached the best level in recent years. The reporter noted that up to now, Industrial Bank Co.Ltd(601166) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , Bank Of Jiangsu Co.Ltd(600919) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , China Citic Bank Corporation Limited(601998) has issued performance express, and Bank Of Chengdu Co.Ltd(601838) has also disclosed performance forecast. Among them, Bank Of Jiangsu Co.Ltd(600919) and Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) net profit attributable to parent company increased by 30.72% and 20.72% respectively year-on-year, both reaching the highest growth level in recent ten years; The net profit attributable to the parent company increased by 24.1% year-on-year, also the highest level in recent nine years.
It is worth mentioning that bank stocks have come out of a good market recently. Since the beginning of the year, the bank (CITIC) index has increased by 4.16%, ranking second among CITIC’s 30 primary industries, second only to the real estate sector. A number of banking analysts published research reports that banking stocks often performed well in January, the fundamentals of listed banks are expected to continue to improve, and they are firmly optimistic about the market of the banking sector for some time in the future.
The performance growth of many banks reached the best level in recent years
From the six listed banks that have disclosed the performance express or performance forecast, the performance growth rate is quite bright, and the asset quality has been further consolidated.
In terms of stock banks, Industrial Bank Co.Ltd(601166) realized a net profit of 82.68 billion yuan attributable to shareholders of the parent company last year, a year-on-year increase of 24.10%. By the end of 2021, the bank’s total assets were 8.6 trillion yuan, an increase of 8.96% over the end of the previous year. In terms of asset quality, the bank’s non-performing loan ratio was 1.10%, down 0.15 percentage points from the end of the previous year; The provision coverage rate was 268.73%, an increase of 49.9 percentage points over the end of the previous year.
It is worth mentioning that Industrial Bank Co.Ltd(601166) has recently completed the issuance of 50 billion yuan of convertible bonds. The raised funds will help to improve the bank’s capital adequacy ratio, so as to enhance its ability to resist risks and promote the sustainable and steady development of its business.
China Citic Bank Corporation Limited(601998) last year, the net profit attributable to shareholders was 55.641 billion yuan, an increase of 13.6% over the previous year, also the highest growth level since 2014. By the end of 2021, the non-performing loan ratio of the bank was 1.39%, down 0.25 percentage points from the end of the previous year; The provision coverage rate was 182.14%, an increase of 10.46 percentage points over the end of the previous year.
In terms of urban commercial banks, the performance express showed that last year Bank Of Jiangsu Co.Ltd(600919) achieved an operating revenue of 63.771 billion yuan, a year-on-year increase of 22.58%; The net profit attributable to shareholders of listed companies was 19.694 billion yuan, a year-on-year increase of 30.72%, which is the bank with the highest net profit growth rate at present. By the end of 2021, the bank’s total assets were 2.62 trillion yuan, a year-on-year increase of 12%; The balance of various loans was 1.4 trillion yuan, a year-on-year increase of 16.52%. At the end of the reporting period, the non-performing loan ratio of the bank was 1.08%, a decrease of 0.24 percentage points compared with the beginning of the period, and has decreased year by year since its listing; The provision coverage rate was 307.72%, an increase of 51.32 percentage points over the beginning of the period, and has increased year by year in the six years since its listing.
A few days ago, Bank Of Chengdu Co.Ltd(601838) located in the southwest also took the lead in issuing a performance pre increase announcement. The bank expects that the net profit attributable to shareholders of Listed Companies in 2021 will increase by RMB 1.085 billion to RMB 1.507 billion compared with the same period of last year, with a year-on-year increase of 18% to 25%.
For the main reasons for the pre increase in performance, Bank Of Chengdu Co.Ltd(601838) explained that there are three main reasons: first, the asset scale has increased steadily, the customer deposit funds have formed a strong guarantee in supporting the scale growth, and the asset liability structure has remained stable; Second, the credit business expanded well, and the proportion of total loans in assets further increased; Third, cost control measures are effective, and the cost income ratio is maintained at a low level.
In terms of rural commercial banks, Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) achieved an operating revenue of 7.653 billion yuan last year, a year-on-year increase of 16.27%; The net profit attributable to common shareholders was RMB 2.184 billion, a year-on-year increase of 21.13%. The non-performing loan ratio was 0.81%, down 0.15 percentage points from the beginning of the year; The provision coverage rate was 531.98%, an increase of 46.65 percentage points over the beginning of the year.
Last year, the operating income was 3.821 billion yuan, and the net profit attributable to the shareholders of the parent company was 1.148 billion yuan, a year-on-year increase of 20.72%. By the end of 2021, the bank’s non-performing loan ratio was 1%, down 0.28 percentage points from the beginning of the year; The provision coverage rate was 411.10%, an increase of 105.79 percentage points over the beginning of the year.
Analysts are optimistic about the banking sector
It can be seen that the fundamentals of the banking industry continue to improve. According to the data previously disclosed by the CBRC, in the first three quarters of 2021, commercial banks achieved a cumulative net profit of 1.7 trillion yuan, a year-on-year increase of 11.5%; The quality of credit assets was basically stable, the non-performing loan ratio decreased continuously to 1.75%, and the provision coverage ratio increased continuously to 196.99%.
It is worth mentioning that, since the beginning of the year, while the track stocks “fell numb” frequently boarded the hot search, the banking sector rose against the market and walked out of a good market as a whole. For example, Bank Of Chengdu Co.Ltd(601838) has increased by 16.5% year to date, and Bank Of Jiangsu Co.Ltd(600919) , Industrial Bank Co.Ltd(601166) has also increased by more than 12%.
Many brokerage analysts also said in the research report that they are optimistic about the next performance of bank stocks.
Huatai Securities Co.Ltd(601688) analyst Shen Juan said that in the history of resumption of trading, the banking sector often obtained excess returns relative to the Shanghai stock index in January, mainly driven by performance release, policy catalysis and capital allocation. The market has strong expectations for loose monetary policy and active fiscal policy, and the banking business environment is expected to improve. At the same time, the banking sector has a certain defensive attribute. In January, a new round of assessment cycle was opened for institutional funds, and some funds were allocated to the banking sector. Optimistic about the plate repair market driven by three factors.
Everbright Securities Company Limited(601788) Wang Yifeng, chief analyst of the banking industry, also pointed out that the current overall valuation of the banking sector is only 0.65 times Pb (LF), which is at a historical low. From the performance of the banking sector from 2011 to 2021, it can be clearly seen that in most years, the trend of the banking sector was better in the first quarter, especially in January, the winning rate of the banking sector recorded a higher relative return.
Wang Yifeng said that he is firmly optimistic about the performance of the banking sector for some time in the future. For the investment logic in the first quarter, we can focus on three main lines: the rebound main line caused by the suppression and weakening of real estate risk; The main line of sound operation of high-quality regional local banks; At the beginning of the year, the main line of “Touyan” bank with stable credit supply.
