\u3000\u3 China Vanke Co.Ltd(000002) 142 Bank Of Ningbo Co.Ltd(002142) )
The scale expansion was further accelerated, and the deposit increased by 23.3% in a single quarter, a new high since 2016.
1) asset side: customer expansion + project reserve were promoted in an orderly manner. The total assets of Bank Of Ningbo Co.Ltd(002142) increased by 10.1% to 2.22 trillion compared with the beginning of the year (with a year-on-year growth rate of 28.8%, and continued to increase by 4.9 PC compared with the end of the year 21), of which loans increased by 67.2 billion (+ 7.8%) to 929.9 billion (with a year-on-year increase of nearly 20 billion), of which 50.2 billion was invested in corporate (with a month on month growth rate of 11%), 6.65 billion in retail (with a growth rate of 2%), and bills increased by 10.3 billion (with a growth rate of 15.8%). Meanwhile, investment assets increased by 47.3 billion (+ 4.8%), which is expected to mainly increase the investment in tax-free assets.
2) liability side: the deposit scale is nearly 1.3 trillion, with an increase of 245.8 billion (+ 23.3%, the highest single quarter increase since 2016) in Q1 alone. Structurally, personal and corporate deposits increased by 16.1% and 25% respectively. Driven by the high growth of deposits, the deposit loan ratio of 22q1 (71.6%) decreased significantly by 10.3pc compared with the beginning of the year, further opening up space for future expansion.
In addition, as Bank Of Ningbo Co.Ltd(002142) general deposits concentrated in Q1 and loans increased steadily between Q1 and Q4, Q1 deposits made a record start this year, and the new deposits were significantly higher than the scale of loans. As the subject of “cash and deposit with the central bank”, its surplus deposits increased by 80 billion over the beginning of the year.
Generally speaking, in terms of weak demand for physical credit and increasingly fierce competition for deposits (bidding trend, centralized collection of social security funds, etc.), the “good start” of Bank Of Ningbo Co.Ltd(002142) 22q1 deposits and loans at both ends of Bank Of Ningbo Co.Ltd(002142) 22q1 has increased significantly, and the speed of business expansion has further improved, reflecting its strong core customer base.
The interest margin increased by 3bps month on month, and the performance maintained high growth. The growth rates of Q1 revenue, PPOP and profit in 2022 were 15.4%, 17.8% and 20.8% respectively, which were lower than those in 2021. The ROA and roe of 22q1 were 1.13% and 16.63% respectively, with a year-on-year decrease of 0.05pc and 1.23pc. From the specific analysis:
1. Net interest income (9.49 billion) increased by 12.6% year-on-year and decreased month on month. Mainly due to:
1) the difference in the recognition of 21q1 interest margin caliber makes the base higher (21q1 interest margin is 2.55%, and 21h modified caliber is 2.33%). Excluding the disturbance of this factor, it is roughly assumed that the interest margin under the same caliber in 21q1 is 2.33%, and it is estimated that the growth rate of net interest income in 22q1 will increase to 23.3%; On a month on month basis, the 22q1 interest rate spread was 2.24%, steadily increased by 3bps compared with 21a, and the net interest margin was 2.76%, increased by 2bps on a month on month basis.
2) the difference in the rhythm of deposit and loan delivery has brought short-term “disturbance”, which has increased the cash and deposit of Q1 by 80 billion. The yield of this part is low (only 1.36% in 21a), which is higher than its comprehensive capital cost (2.13%), which is equivalent to the “net loss” of this capital for the time being. With the steady investment of assets (the rate of return on interest bearing assets is 4.59%), it is expected that the follow-up income will be gradually reflected.
We conduct static calculation according to two ideas:
1) assuming that “there is no disturbance of 80 billion”, it is estimated that 800 (2.13% – 1.16%) / 4 = 154 million can be saved in a single quarter, increasing the net interest income and revenue by 1.8pc, 1.2pc to 14.4% and 16.6%;
2) assuming that the 80 billion yuan is put into assets, it is estimated that 800 (4.59% – 1.36%) / 4 = 650 million should be obtained in a single quarter, increasing the net interest income and revenue by 7.7pc, 4.9pc to 20.3% and 20.3%.
2. Non interest income (5.77 billion) increased by 20.3% year-on-year, of which: 1) net income from handling fees and commissions (1.81 billion) increased by 0.9% year-on-year, mainly due to the impact on agency income (consignment funds, insurance, trust, precious metals, etc.) under the condition of large fluctuations in Q1 capital market; 2) Other non interest income (3.96 billion, + 31.9%) increased by 960 million year-on-year, of which increasing tax-free asset allocation and bond investment was better, driving the investment income (3.59 billion, + 64%) increased by 1.4 billion year-on-year.
3. Others: when the overall asset quality is stable, further increase the provision (year-on-year + 22%). After the enrollment expansion in previous years, the current personnel team is basically stable, and the cost income ratio (32.7%) has decreased by 1.6pc year-on-year. With the more experienced personnel team and more mature training, the per capita capacity is expected to continue to be released in the future. In addition, the tax-free assets of RMB 1.48 billion were less than that of RMB 1.42 billion on a year-on-year basis.
Asset quality: continue to be stable and relatively good. At the end of March, the non-performing rate (0.77%) was the same as that at the beginning of the year, and the proportion of concerned loans (0.51%) continued to maintain a low level. Under the condition of increasing the provision provision, the allocation loan ratio (4.06%) increased steadily by 0.03pc month on month, and the provision coverage rate was 525%, which was basically the same month on month. The scale of Q1 write off was 1.76 billion, and the non-performing generation rate (1.08%) after adding back the write off was higher than that of the whole year of 21 years (0.71%), mainly as follows: 1) the time point of non-performing identification of credit card and consumer credit was adjusted at one time, and the identification was more strict; 2) Bank Of Ningbo Co.Ltd(002142) risk control is strict. As long as one of the customer’s multiple credits is identified as non-performing, all other businesses will be identified as non-performing; 3) Increase credit sinking efforts (for example, white-collar pass has gradually expanded from white-collar a to white-collar B, C and other products). Although the non-performing rate has increased to a certain extent, the rate of return is also higher. In a comprehensive view, it can well cover risks.
Investment suggestion: Management landing + high growth in the future, actively optimistic about Bank Of Ningbo Co.Ltd(002142) the investment opportunities Bank Of Ningbo Co.Ltd(002142) has always had steady and solid asset quality. Its fundamentals are superior among urban commercial banks, and 22q1 has performed well. In the medium and long term, Bank Of Ningbo Co.Ltd(002142) 15 profit centers are “open to the outside world”, which is expected to continue to grow at a high level in the next three years. There is no need to worry about credit risk: they basically do not participate in real estate business, and corporate and mortgage loans account for only 4.2% and 4.3%; Short term capital supplement or no pressure: 22q1 Bank Of Ningbo Co.Ltd(002142) core tier 1 / Tier 1 / capital adequacy ratio has reached 9.93% / 10.98% / 14.92%, far higher than the regulatory requirements. According to the outlook of the annual report, Bank Of Ningbo Co.Ltd(002142) 22 only proposed to issue tier 2 capital bonds of no more than 22.5 billion, and will strengthen endogenous capital supplement. In addition, at the end of March, Mr. Zhuang Lingjun officially took office as Bank Of Ningbo Co.Ltd(002142) president and vice chairman, and Mr. Luo Weikai as vice president and financial director. He is optimistic that the whole bank will work together under the leadership of the chairman to maintain high quality and high growth. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 23.815 billion, 29.185 billion and 36.007 billion respectively. The current share price corresponding to 20212023pb is only 1.72x, 1.50x and 1.29x. The current position is actively recommended and the “buy” rating is maintained.
Risk tip: the downward pressure on the macro economy has increased, the financial supervision has exceeded expectations, and the monetary policy has turned to exceed expectations.
