\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 919 Bank Of Jiangsu Co.Ltd(600919) )
Event:
On April 28, Bank Of Jiangsu Co.Ltd(600919) released the report for the first quarter of 2022. In the first quarter, the operating revenue was 17.033 billion, yoy + 11.0%, and the net profit attributable to the parent company was 6.584 billion, yoy + 26%. The weighted average return on net assets is 15.02% (YoY + 2.31pct).
Comments:
The revenue and profit maintained double-digit growth, and the provision effectively fed the profits. In 2022, Q1 Bank Of Jiangsu Co.Ltd(600919) revenue, profit before provision and net profit attributable to parent company increased by 11.0%, 14.0% and 26.0% respectively year-on-year, with growth rates of – 11.5, – 10.6 and – 4.7pct respectively compared with 2021, of which net interest income increased by 13.6% year-on-year, down 9.3pct compared with 2021. From the perspective of splitting the profit growth structure, (1) scale expansion and interest margin improvement are still the main contributions, driving the performance growth of 22.7% and 4.9% respectively, down 8.3 and 18.4pct respectively compared with 2021. (2) The contribution of provision to profit recorded 9.5%, an increase of 8.8pct compared with 2021, mainly due to the decline of credit cost rate under the condition of double decline of non-performing rate and non-performing balance. In 2022, the credit impairment and loss in Q1 increased by 4.652 billion, and the year-on-year growth rate decreased to – 10%, a further decrease of 9.5pct compared with 2021. The provision has a certain back feeding profit space. (3) The contribution of non interest income was 4.8%, down 16.6pct from 2021, but better than the same period last year. Overall, under the background of insufficient effective demand of the real economy, the company still continued the driving logic of “equal volume and price” in the early stage. In the first quarter, the revenue and profit increased steadily, the asset quality continued to improve, and the provision effectively fed the profits.
In the first quarter, the focus was on corporate loans, and the credit supply continued to be “small and scattered”. At the end of the first quarter of 2022, Bank Of Jiangsu Co.Ltd(600919) interest bearing assets and loans grew by 10.1% and 15.4% year-on-year respectively, down 1.8 and 1.2pct respectively compared with 2021. The decline narrowed by 1bp and expanded by 7bp respectively month on month, and the expansion speed slowed down. Among them, loans increased by 65.388 billion yuan in the first quarter, a year-on-year decrease of 3.439 billion yuan, accounting for 54.3%, a decrease of 0.36 PCT compared with 2021, and the credit supply maintained a certain intensity. In terms of loan structure, (1) corporate loans are still the focus of credit supply. In 2022, Q1 increased by 101205 billion yuan, an increase of 12.059 billion yuan year-on-year, and the stock increased by 4.59pct to 56.4% compared with 2021. (2) Retail loans increased by – 13.17 billion yuan in Q1, a year-on-year decrease of 27.364 billion yuan. It is expected that the company’s Q1 consumer loans and credit cards will be affected to a certain extent due to the repeated spread of the epidemic in Shanghai and other places to the Yangtze River Delta.
Deposit absorption has been strengthened and the debt structure has been continuously optimized. At the end of the first quarter of 2022, Bank Of Jiangsu Co.Ltd(600919) interest payment liabilities and deposits increased by 10% and 13% year-on-year respectively, a decrease of 1.9pct and an increase of 1.9pct respectively compared with 2021. In terms of liability structure, the proportion of deposits increased by 2.69pct to 64.3% month on month compared with the end of 2021. The proportion of market liabilities such as bonds payable and interbank liabilities decreased by 2.27 and 0.41pct respectively compared with the beginning of the year. The liability structure continued to be optimized. In terms of strategic deposit structure, PCT and retail deposits accounted for 30.01% and 1.052% respectively, highlighting the effect of transformation at the beginning of the year.
Debt cost control has effectively driven the steady increase in interest margin. The calculation results show that the interest margin level of the company in the first quarter was 1.89%, an increase of 4bp year-on-year and 1bp compared with the beginning of the year, maintaining a steady growth trend since 2020. Among them, the rate of return on interest bearing assets was 4.22%, a decrease of 10bp compared with 2021, which is mainly related to the point spread pressure drop caused by the repricing effect superimposed by insufficient effective demand after the LPR reduction in December last year and January this year. However, the cost ratio of interest bearing liabilities improved 7bp to 2.53% compared with 2021, mainly due to the company’s increasing absorption of core deposits and actively optimizing the debt structure.
The growth of non interest income was flat, with handling charges and commission income as the main drag. Q1 Bank Of Jiangsu Co.Ltd(600919) non interest income in 2022 increased by 4.6% year-on-year, down 17pct from 2021. In terms of structure, the year-on-year growth rate of fee and commission income was 9.8%, down 30 PCT from 2021; The year-on-year growth rate of net other non interest income was 1%, down 10.5pct from 2021.
The rate of non-performing goods + attention decreased, and the ability of risk offset continued to increase. By the end of the first quarter of 2022, Bank Of Jiangsu Co.Ltd(600919) NPL ratio was 1.03%, down 5bp from the end of 2021, continuing the trend of quarterly pressure drop. The concern + non-performing loan ratio was 2.36%, which was 6 bp lower than that at the end of 2021. The pressure of non-performing loans was relieved, and the asset quality continued to improve. At the end of the first quarter, the Bank Of Jiangsu Co.Ltd(600919) provision coverage rate was 330.07%, 22.35pct higher than that at the end of 2021, the risk offset capacity was improved, and the asset safety cushion continued to thicken.
The capital adequacy ratio decreased slightly. At the end of the first quarter of 2022, Bank Of Jiangsu Co.Ltd(600919) core tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio were 8.41%, 10.52% and 12.75% respectively, with a quarter on quarter decline of 0.37, 0.55 and 0.63 PCT respectively. At the end of the first quarter, the year-on-year growth rate of the company’s risk weighted assets was 16.25%, with a quarter on quarter decrease of 0.47pct.
Earnings forecast, valuation and rating Bank Of Jiangsu Co.Ltd(600919) after years of steady operation, various business indicators are expected to continue to achieve good performance. The company continues to make efforts in high-yield fields such as retail mortgage + consumer loan, the overall layout of wealth management sector continues to expand, and AUM ranks first among listed urban commercial banks Bank Of Jiangsu Co.Ltd(600919) has entered the “fast lane” of development. With the continuous excellent performance of the company’s profits, the follow-up capital is expected to be supplemented and the momentum of business expansion is strong. Therefore, we maintain the EPS forecast of 20222024 at 1.62/1.93/2.21 yuan, and the corresponding Pb of the current stock price is 0.63/0.56/0.49 respectively, maintaining the “buy” rating.
Risk tip: credit easing is less than expected, and commodity prices continue to rise.
