\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
Summary of performance: Bank Of Ningbo Co.Ltd(002142) 1 quarter net profit increased by 20.8% year on year, and operating revenue increased by 15.4% year on year; The cost income ratio was 32.7%, down 1.59 percentage points year-on-year. At the end of the quarter, total assets increased by 10.4%, loans increased by 7.8% and deposits increased by 23.3% compared with the beginning of the year. The year-end non-performing rate was 0.77%, the provision coverage rate was 525%, the allocation loan ratio was 4.06%, and the core tier 1 / capital adequacy ratio was 9.93% / 14.92%. In the first quarter, the annualized roe decreased by 1.23 percentage points year-on-year to 16.63%.
The deposit growth of the company in the first quarter exceeded expectations, supporting the month on month recovery of interest rate spread and the business expansion on the asset side. We believe that excellent management, market-oriented gene and flexible mechanism ensure the excellent fundamentals and sustainable growth of the company, which are also the core of Bank Of Ningbo Co.Ltd(002142) valuation premium given by the market and continue to be optimistic. In the short term, the epidemic situation may have an impact on exports and the operation of private enterprises.
Key points supporting rating
Deposits grew stronger than expected, promoting the recovery of interest rate spread month on month
On the liability side, deposits in Bank Of Ningbo Co.Ltd(002142) 1 quarter increased by 23.3% over the beginning of the year, exceeding market expectations and better supporting the business expansion and allocation freedom on the asset side. In the first quarter, the scale maintained a high growth, the assets increased by 10.1% compared with the beginning of the year, and the deposits with the central bank / interbank assets / loans / securities investment increased by 83.4% / 14.8% / 7.8% / 4.9% respectively. Considering the impact of repeated outbreaks on exports and the operation of private enterprises, it is necessary to follow up the trend of local credit demand Bank Of Ningbo Co.Ltd(002142) 1 quarterly interest margin (2.24%) is wider than that in 2021 (2.21%). According to our calculation, the interest rate spread in the first quarter was 16bp higher than that in the fourth quarter of 2021. Among them, under the excellent performance of deposits, the cost rate of the liability side decreased by 26bp month on month in the first quarter, which was greater than the downward range of the return rate of the asset side (18bp).
The asset quality is stable and the provision coverage rate ranks first
Bank Of Ningbo Co.Ltd(002142) asset quality advantage was maintained, and the non-performing rate at the end of the first quarter was the same as that at the beginning of the year, which was 0.77%; Concern loans accounted for 0.51% of the upward 3bp at the beginning of the year, but maintained a low level of listed banks. According to our calculation at the end of the initial period, the annualized NPL generation rate in the first quarter was 1.03%, an increase of 48bp year-on-year. In the past, the company has excellent asset quality performance, strong risk control ability, prudent recognition of non-performing assets, and the asset quality still maintains the excellent level of listed banks. At the end of the first quarter, the provision coverage rate was 525%, basically unchanged month on month.
Valuation
Maintain the company’s forecast of EPS of 3.59/4.33 yuan in 2022 / 2023. At present, the corresponding price to book ratio of 2022 / 2023 is 1.50x and 1.29x, and maintain the buy rating.
Main risks of rating
Repeated epidemics and economic downturn have led to the deterioration of asset quality beyond expectations; Regulatory control exceeded expectations.
