\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
Event:
On April 26, Bank Of Ningbo Co.Ltd(002142) released the first quarterly report of 2022, realizing an operating revenue of 15.26 billion yuan, yoy + 15.4%, and a net profit attributable to the parent company of 5.72 billion yuan, yoy + 20.8%. The weighted average return on net assets (ROE) is 16.6%, yoy-1.23pct.
Comments:
The growth rate of performance remained high, and the support of non interest income was obvious. The company’s 22q1 operating revenue, profit before provision and net profit attributable to the parent company increased by 15.4%, 17.8% and 20.8% year-on-year respectively, and the quarter on quarter ratio decreased by 13, 12.8 and 9.1pct respectively. The year-on-year growth structure was carefully disassembled. The expansion of asset scale and non interest income were the main contribution sub items, driving the performance growth rate of 46.1 and 20.1pct respectively. The drag on the expense and provision side was narrowed, and the negative drag on the interest margin was increased, indicating that the company maintained a stable growth in net interest income through “compensation by volume”.
Table expansion was further accelerated, and general deposits increased by more than 23% over the beginning of the year Bank Of Ningbo Co.Ltd(002142) deeply cultivated in Jiangsu, Zhejiang and other high-quality areas, with strong regional economic vitality and strong credit demand, the net interest income in the first quarter increased by 12.6% year-on-year to 9.494 billion yuan, mainly benefiting from the rapid growth of asset side scale.
The momentum of asset side expansion was strong, focusing on corporate loans in the first quarter. At the end of the first quarter, the total assets of the company increased by 28.8% compared with the end of the previous year, and the growth rate increased by 4.9pct quarter on quarter. Among them, the new assets in the first quarter were 203585 billion yuan, an increase of 107611 billion yuan year-on-year. The expansion of the company’s statements in the first quarter further accelerated, forming a good support for the net interest income. Among them, loans increased by 67.205 billion, an increase of 18.448 billion year-on-year, corresponding to the growth rate of loan balance at the end of the first quarter of 26.3%, an increase of 0.8pct quarter on quarter, and the credit supply showed the characteristics of “booming supply and demand”. In terms of credit structure, new corporate, retail and bills accounted for 74.8%, 9.9% and 15.3% of new interest bearing assets respectively. In the first quarter, credit resources were mainly inclined to corporate.
The proportion of deposits increased and the debt structure was further optimized. At the end of the first quarter of 2022, the total liabilities and deposits of the company increased by 29.0% and 25.2% respectively year-on-year, with the growth rate increasing by 5.3 and 11.4 PCT respectively compared with the beginning of the year. From the perspective of liability structure, deposits, bonds payable and inter-bank liabilities accounted for 66.1%, 18.4% and 15.5% respectively, of which the proportion of deposits increased significantly by 6.4pct compared with the beginning of the year, and the liability structure was further optimized. The high increase in corporate deposits was mainly due to the significant increase in corporate deposits. In the first quarter, new corporate deposits accounted for 86% of new deposits, which promoted the proportion of corporate deposits to increase by 1.2pct to 80.9% compared with the beginning of the year.
The interest margin increased 3bp to 2.24% over the beginning of the year, benefiting from the effective control of debt costs. The company’s interest margin level in the first quarter was 2.24%, an increase of 3bp over the beginning of the year. It is expected to mainly benefit from the optimization of debt structure. Under the background of insufficient effective demand of the real economy, the company still had great downward pressure on the asset side yield in the first quarter. It is estimated that the yield of interest bearing assets decreased by 14bp to 3.68% compared with the beginning of the year. However, the company guided the downward trend of liability cost by optimizing the liability structure, and the cost rate of interest bearing liabilities decreased by 15bp to 2.06% compared with the beginning of the year, effectively hedging the downward pressure on the asset side yield. Looking back, the growth rate (+ 23.3%) of the company’s deposit side in the first quarter compared with the beginning of the year far exceeded that of the loan side (+ 7.8%), and the incremental deposit loan ratio was only 27.3%. The matching degree between the source of funds and the use of funds in the deposit loan sector has been greatly improved. It is expected that the upward pressure on the subsequent liability side cost is limited, and the interest margin has a stable operation basis.
Non interest income grew by 20.3%, accounting for 38%, and net other non interest income recorded a good performance. In 2022q1, the company’s non interest income increased by 20.3% year-on-year to 5.769 billion yuan. Among them, the net fee and commission income increased by 0.9% year-on-year to RMB 1.809 billion. Although the fluctuation of the capital market intensified at the beginning of the year, the net fee and commission income of the company remained relatively resilient; Net other non interest income increased significantly by 31.9% year-on-year to RMB 3.96 billion, mainly driven by the year-on-year increase in investment income (a year-on-year increase of 64.1%). It is expected that the company will better grasp the band opportunity in Q1 this year, reflecting the company’s strong bond investment ability.
The non-performing loan ratio remained at a low level of 0.77%, with strong risk offsetting ability. By the end of the first quarter of 2022, Bank Of Ningbo Co.Ltd(002142) NPL ratio was 0.77%, unchanged from the beginning of the year, and remained stable below 0.8% since the end of 2018; The NPL + concern rate increased 4bp to 1.28% over the beginning of the year, but it is still at a historical low. The provision coverage ratio decreased slightly by 0.7pct to 524.8% compared with the beginning of the year, and the loan allocation increased by 3bp to 4.06% compared with the beginning of the year. The overall provision level of the company remained stable. In fact, the provision of the company increased in the first quarter, and the credit impairment loss / average total assets increased by 0.12pct to 0.8% compared with the beginning of the year. However, under the background of increasing downward pressure on the economy, the overall net generation of non-performing assets in the industry is expected to rise.
Due to the rapid expansion of the asset side, the company’s capital adequacy ratio decreased slightly. At the end of the first quarter of 2022, the company’s core tier 1 capital adequacy ratio / Tier 1 capital adequacy ratio / capital adequacy ratio were 9.93% / 10.98% / 14.92% respectively, with a quarter on quarter decrease of 0.23pct/0.31pct/0.52pct respectively. The company’s capital adequacy ratio has decreased. On the one hand, there is the high base effect formed by the landing of 21q4 company’s allotment. On the other hand, 22q1 company’s asset side has expanded rapidly, with loans increasing by 7.8% and risk weighted assets increasing by 6.9% compared with the beginning of the year, which consumes capital formation.
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. We maintain the company’s EPS forecast of 3.62/4.37/5.21 yuan from 2022 to 2024, and the corresponding Pb valuation of the current stock price is 1.50/1.30/1.12 times respectively, 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.
