The growth rate of net profit of listed banks in the first quarter of this year generally exceeded market expectations. As of the evening of April 26, a total of 9 A-share listed banks had released the first quarter report of 2022, and the net profits attributable to the shareholders of the parent company (hereinafter referred to as “net profits”) of 9 banks had maintained a double-digit year-on-year growth rate.
For the overall situation of listed banks, the double-digit growth of net profit in the first quarter is expected to become a trend, and the overall asset quality remains stable. Looking forward to the second quarter, many insiders believe that the steady growth policy is good for the banking industry. As a key period of steady growth, the joint efforts of various policies are expected to improve the demand of economic entities in the second quarter, and the banking sector will be boosted again.
net profit growth exceeded market expectations
On the evening of April 26, Bank Of Ningbo Co.Ltd(002142) , Bank Of Suzhou Co.Ltd(002966) , Ping An Bank Co.Ltd(000001) respectively released the first quarter report of 2022. The net profit of the three banks in the first quarter increased by 20.80%, 20.56% and 26.83% respectively year-on-year.
Before that, Bank Of Nanjing Co.Ltd(601009) , Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) , China Merchants Bank Co.Ltd(600036) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , China Zheshang Bank Co.Ltd(601916) , Bank Of Hangzhou Co.Ltd(600926) also successively released the results of the first quarter. The net profit growth rates of the above banks in the first quarter were 22.33%, 29.74%, 12.52%, 23.38%, 11.84% and 31.39% respectively.
From the current data, the double-digit growth of net profit in the first quarter has become the performance highlight of the banking sector. Especially for some urban commercial banks and rural commercial banks, the net profit growth rate exceeded 20% or even 30%.
Specifically, in the first quarter of this year, Bank Of Hangzhou Co.Ltd(600926) achieved a net profit of 3.309 billion yuan, a year-on-year increase of 31.39% Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) realized a net profit of 433 million yuan, a year-on-year increase of 29.74% Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) realized a net profit of 659 million yuan, a year-on-year increase of 23.38% Bank Of Nanjing Co.Ltd(601009) realized a net profit of 5.015 billion yuan, a year-on-year increase of 22.33%.
The net profit of China Merchants Bank Co.Ltd(600036) and Ping An Bank Co.Ltd(000001) in the first quarter also increased by double digits. In the first quarter of this year, China Merchants Bank Co.Ltd(600036) achieved a net profit of 36.022 billion yuan, a year-on-year increase of 12.52% Ping An Bank Co.Ltd(000001) achieved a net profit of 12.85 billion yuan, an increase of 26.83% year-on-year.
“Since 2022, the overall operation of the banking industry has remained stable. From the financial report of the first quarter of this year, the overall performance of listed banks will continue to grow, and the growth rate of revenue and profit may be ‘stable and slightly lower’ compared with the same period last year, which is still at a relatively high level.” A banking analyst said.
asset quality is stable and improving
From the listed banks that have disclosed the first quarterly report, the asset quality remains stable, and the non-performing indicators show the characteristics of stability and improvement.
The non-performing loan ratio of most banks was flat or declining compared with the end of last year. For example, by the end of the first quarter of this year, Bank Of Nanjing Co.Ltd(601009) NPL ratio was 0.9%, down 0.01 percentage points from the end of last year Bank Of Hangzhou Co.Ltd(600926) NPL ratio was 0.82%, down 0.04 percentage points from the end of last year Bank Of Ningbo Co.Ltd(002142) NPL ratio was 0.77%, which was the same as that at the end of last year and continued to maintain a low level in the industry Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) NPL ratio was 0.81%, the same as that at the end of last year China Zheshang Bank Co.Ltd(601916) NPL ratio was 1.53%, unchanged from the end of last year.
The non-performing loan ratio of some banks increased, but the range was small. For example, the China Merchants Bank Co.Ltd(600036) non-performing loan ratio was 0.94%, an increase of 0.03 percentage points over the end of last year.
In this regard, China Merchants Bank Co.Ltd(600036) said that the company would closely track the changes in the macro situation, continue to adjust the customer structure and credit structure, strengthen risk monitoring and early warning in key areas such as real estate, local government credit and large group customers, formulate targeted control plans, effectively prevent, resolve and dispose of potential risks, fully make provisions, take multiple measures to increase the disposal of non-performing assets, and strive to maintain the overall stability of asset quality.
sector valuation is expected to be repaired
The disclosure of the first quarterly report of listed companies is coming to an end. For investors, they are more concerned about whether the performance of the banking sector can continue to maintain a high growth rate in the second quarter greatly affected by the epidemic.
On April 18, Zhuang Lingjun, President of Bank Of Ningbo Co.Ltd(002142) Bank of Jiangsu, Zhejiang and Shanghai, said: “the epidemic has had a certain impact on our daily operation, but judging from the recent market research, customer exchanges and other situations, it is generally controllable.”
Recently, Wang Yiming, a member of the monetary policy committee of the people’s Bank of China, said, “stronger policy measures must be taken to ensure that the economic growth rate returns to more than 5% in the second quarter, so as to lay the foundation for achieving the expected goal of annual economic growth.” This also means that in the second quarter, relevant departments will step up planning for more vigorous policies and measures to stabilize growth. Analysts expect that as the “steady growth” in the second quarter enters a critical period, the credit structure of the banking industry will continue to be optimized, and the market interest rate is expected to decline steadily, further reducing the financing cost of the real economy.
According to Lin Jiali, an analyst at Haitong international securities, the banking industry is the “intersection” of various industries with stable growth policies. Whether it is the change of monetary policy, the fine-tuning in the field of infrastructure and real estate, or the policy of steady growth in some specific real industries, it will be implemented on the fundamentals of the banking industry.
Looking forward to the second quarter, Shenwan Hongyuan Group Co.Ltd(000166) analyst Zheng Qingming said that at present, it is in the transition stage of “wide credit – steady growth”. As a key point of steady growth, the joint efforts of various policies in the second quarter are expected to improve the physical demand and further repair the valuation of the banking sector. At the same time, from the perspective of banking fundamentals, the disturbance of the epidemic to asset quality is limited
