\u3000\u3 China Vanke Co.Ltd(000002) 966 Bank Of Suzhou Co.Ltd(002966) )
Summary of quarterly report: Bank Of Suzhou Co.Ltd(002966) in 2022, Q1 net profit was 1.073 billion yuan, with a year-on-year increase of 20.6%. The performance growth mainly comes from the less provision, the rapid growth of scale and non interest. Among them, the net interest income decreased by 1.0%, the net fee income increased by 22.1%, other non interest income increased by 13.9% and the operating income increased by 5.0% year-on-year; Total assets increased by 9.8%, total loans by 7.5% and deposits by 8.4% over the beginning of the year. The non-performing rate is 0.99%, the provision coverage rate is 464%, and the core tier 1 capital adequacy ratio is 9.78%.
Bank Of Suzhou Co.Ltd(002966) in the first quarter of 2021, the performance continued to grow rapidly, promoting the improvement of profitability, the handling fee continued to grow rapidly, the asset quality was good, and the provision was sufficient. The performance growth mainly comes from the contribution of the improvement of asset quality driving the less provision of incremental provisions and the rapid growth of scale and non interest income. The report has excellent performance in terms of handling fees and asset quality: the handling fee income has continued to grow high year-on-year, driven by the high growth of financial management business last year. In the first quarter, the company obtained the qualification of fund custody, and the wealth retail business may continue to perform positively. Asset quality continued to improve significantly, and loan provision coverage increased. At the same time, we are also concerned that the interest margin pressure may continue in the first quarter, and the growth rate of risky assets is slightly faster.
Key points supporting rating
Profitability increased, weighted risk assets grew rapidly, and core tier 1 capital decreased.
Announce roe12 92%, with a year-on-year increase of 1.12 percentage points, and the return on total assets was 0.93%, unchanged year-on-year. The core tier 1 capital adequacy ratio was 9.78%, a year-on-year decrease of 0.84 percentage points, rorwa (estimated) was 1.32%, a year-on-year decrease of 3bp, the growth rate of the company’s risk assets was 19.2%, exceeding the growth rate of loans by 15.5% in the same period, or due to the rapid growth of credit in other receivables and bond investment.
Handling charges continued to grow rapidly
The handling charges continued to increase by 22.1% year-on-year, accounting for 18%, with a year-on-year increase of 2.52 percentage points.
The quality of assets continued to improve significantly, the coverage of loan provision was improved, and various non-performing indicators were actively improved. The non-performing rate was 0.99%, a decrease of 12bp over the previous year, and the balance of non-performing loans decreased by 4.3% year-on-year. The generation rate of non-performing loans (annualized) was 0.26%, a year-on-year decrease of 2bp. Concerned loans accounted for 0.81%, a decrease of 15bp over the previous year. The provision coverage rate was 463.64%, an increase of 0.4 percentage points over the previous year.
Valuation
We predict that the company’s EPS will reach 1.14/1.35 yuan in 2022 / 2023. At present, the share price corresponds to 0.67/0.59 times of Pb in 2022 / 2023, maintaining the overweight rating.
Main risks of rating
The economic downturn led to asset quality deterioration exceeding expectations and financial supervision exceeding expectations
