A good start and challenges remain.
On the evening of April 29, the first quarter transcripts of 42 A-share listed banks were released. Through combing, the reporter found that the performance of listed banks was brilliant, of which 36 banks increased their revenue and net profit, and 16 banks increased their net profit by more than 20%. In the context of narrowing the net interest margin, listed banks have increased their credit supply and launched intermediary business. The quality of assets has been continuously optimized and the ability to resist risks has been continuously enhanced.
Under the tone of steady growth, the banking industry achieved a “good start” in the first quarter, and can the banking industry maintain strong growth in the second quarter of the epidemic?
net profit of 16 banks increased by more than 20%
Driven by the growth of business scale, 42 listed banks earned 562541 billion yuan in the first quarter, an increase of 8.71% over the same period last year, of which 36 achieved double growth in operating revenue and net profit, and the net profit of 16 banks increased by more than 20%.
The operation of large state-owned banks has moved forward steadily 97%, 17.81%, 6.33%.
Among the stock banks, China Merchants Bank Co.Ltd(600036) , Industrial Bank Co.Ltd(601166) , China Citic Bank Corporation Limited(601998) , Ping An Bank Co.Ltd(000001) , China Zheshang Bank Co.Ltd(601916) , China Zheshang Bank Co.Ltd(601916) achieved double-digit growth in net profit. In the first quarter, the net profit was 36.022 billion yuan, 27.578 billion yuan, 17.35 billion yuan, 12.85 billion yuan and 5.118 billion yuan respectively, with year-on-year growth rates of 12.52%, 15.62%, 10.93%, 26.83% and 11.84%.
The performance of regional banks was brilliant, and the net profit of 15 banks increased by more than 20%. The fundamentals of urban and rural commercial banks in the Yangtze River Delta remained good. For example, Bank Of Hangzhou Co.Ltd(600926) , Bank Of Jiangsu Co.Ltd(600919) , Bank Of Nanjing Co.Ltd(601009) , Bank Of Ningbo Co.Ltd(002142) net profit increased by 31.39%, 26%, 22.33% and 20.8% respectively.
The net profit of Bank of Lanzhou, which was just listed last year, increased by 94.05% in the first quarter, but its operating revenue decreased by 1.58% year-on-year, including a decrease in net interest income. However, it can be found from the data that the bank’s credit impairment loss in the first quarter of this year was 596.76 million yuan, compared with 963 million yuan in the same period last year, a year-on-year decrease of 38.03%.
It is worth noting that China Minsheng Banking Corp.Ltd(600016) net profit decreased by 6.94%. The bank explained that the loan interest income decreased mainly due to fee reduction and interest transfer Bank Of Xi’An Co.Ltd(600928) operating income and net profit decreased, net interest income, handling fee and commission income decreased year-on-year, and total assets also “shrunk” for the first time since listing.
Affected by the continuous decline of market interest rate, the liability side of banks is generally under pressure, and the net interest margin of many banks has decreased to varying degrees China Merchants Bank Co.Ltd(600036) said that by continuously increasing the proportion of customer deposits in interest bearing liabilities, it made up for the decline in the rate of return on interest bearing assets to a certain extent.
thickening provision
asset quality remains stable
In the first quarter, the asset quality of listed banks remained stable, with an average non-performing loan ratio of 1.23% Bank Of Ningbo Co.Ltd(002142) NPL ratio is the lowest, 0.77%. Lanzhou bank has the highest non-performing loan ratio of 1.82%.
Although the impact of the epidemic has put pressure on asset quality, only a few banks have an upward rate of non-performing loans. For example, China Merchants Bank Co.Ltd(600036) NPL ratio was 0.94%, up 0.03 percentage points from the end of last year Bank Of Guiyang Co.Ltd(601997) NPL ratio was 1.6%, up 0.15 percentage points from the beginning of the year Bank Of Guiyang Co.Ltd(601997) said that the increase of non-performing rate was due to the phased increase of risks in some industries under the influence of the epidemic.
several banks mentioned risk control in the real estate sector
China Merchants Bank Co.Ltd(600036) said that the overall risk of the real estate industry is still in the release stage, and the credit risk of some real estate enterprises continues to be exposed. By the end of the first quarter, the balance of China Merchants Bank Co.Ltd(600036) loans to public real estate was 365266 billion yuan, an increase of 9.289 billion yuan over the end of the previous year, mainly invested in high-quality projects and high-quality customers, accounting for 6.74% of the total loans. However, the non-performing loan ratio of public real estate loans was 2.57%, an increase of 1.18 percentage points over the end of the previous year China Minsheng Banking Corp.Ltd(600016) mentioned that the balance of the bank’s domestic investment in real estate decreased by 18.78% compared with the end of the same period last year.
In order to enhance the ability to resist risks, 33 banks operated with high provision coverage. The average provision coverage of listed banks is 308.25%, and the Bank Of Hangzhou Co.Ltd(600926) provision coverage is as high as 580.09% The provision coverage of Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Bank Of Ningbo Co.Ltd(002142) , Wuxi Rural Commercial Bank Co.Ltd(600908) , Wuxi Rural Commercial Bank Co.Ltd(600908) is also above 500%.
In order to release more credit resources, on April 13, the national standing committee decided to encourage large banks with high provision level to reduce the provision coverage in an orderly manner in view of the changes in the current situation, and timely use monetary policy tools such as RRR reduction to promote banks to enhance their credit supply capacity.
On April 15, Wang Chaodi, chief inspector, director of the general office and spokesman of the CBRC, said that large banks with high provision and other high-quality listed banks were encouraged to gradually return the actual provision coverage to a reasonable level.
In this regard, Bank Of Ningbo Co.Ltd(002142) executives responded at the performance briefing held on April 18: “To appropriately reduce the provision coverage of large banks is mainly to allow large banks to increase more credit to the real economy such as small and medium-sized enterprises and expand the tolerance of non-performing loans. Bank Of Ningbo Co.Ltd(002142) has been committed to serving small and medium-sized enterprises for a long time and has accumulated a relatively mature risk control system. Our provision is drawn in strict accordance with the three-stage different risk conditions required by the Ministry of finance, and there is no reduction or increase in the provision 。”
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) in the investigation of the institution, said that it would make full provision for the risk of all kinds of credit assets and non credit assets in accordance with the requirements of the standards and in combination with the asset quality and expected credit situation, so as to ensure the adequacy of the bank’s credit asset risk reserves. In the future, we will strike a balance in terms of risk offset, shareholder return and capital replenishment, and maintain the provision coverage at a reasonable level.
Overall, the provision coverage of listed banks is relatively high. Among the national commercial banks, only Postal Savings Bank Of China Co.Ltd(601658) , China Merchants Bank Co.Ltd(600036) , China Minsheng Banking Corp.Ltd(600016) reduced the provision coverage in the first quarter.
can we overcome the impact of the epidemic in the second quarter
Although the first quarter started smoothly, many places in the country have been disturbed by the epidemic since March, and the operation of banks in the second quarter has attracted external attention.
When asked about the impact of the epidemic in Jiangsu, Zhejiang and Shanghai on credit supply in the second quarter since March, Bank Of Ningbo Co.Ltd(002142) president Zhuang Lingjun said: “the epidemic has had a certain impact on our daily operation, but from the recent market research, customer exchanges and other situations, it is generally controllable.”
Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) who is also located in Jiangsu, Zhejiang and Shanghai said in an institutional survey that due to the impact of the epidemic, the flow of personnel is limited, and the needs of customers and the exhibition of customer managers are affected. The bank pays close attention to epidemic prevention and control on the one hand and business development on the other hand. By accelerating the development of online business, unblocking online financing channels, improving service efficiency and promoting offline customers to migrate online, the impact of the epidemic on business is related to the duration of the epidemic, We will continue to track the development trend of the epidemic.
Bank Of Suzhou Co.Ltd(002966) also said that the impact of the epidemic on recent credit supply is mainly reflected in personal housing loans and consumer loans. Affected by epidemic prevention and control policies such as reducing unnecessary personnel mobility and home isolation, the opening of new real estate was delayed, second-hand housing transactions were relatively cold, and consumer markets such as tourism and entertainment, accommodation and catering were also affected. However, due to the delayed release of some early-stage credit demand, the bank’s recent credit demand and release are generally good and have not been significantly affected by the epidemic.
When various policy tools are advancing, the banking industry also actively seizes the first opportunity. In the first quarter, listed banks generally increased their investment in corporate loans, targeted around key areas and increased their support for the real economy.
Guosen Securities Co.Ltd(002736) financial industry chief analyst Wang Jian said in the research report that under the main tone of steady growth in 2022, the policy will continue to increase and the real estate policy will be relaxed. As the economy stabilizes and recovers, the banking sector will also usher in better investment opportunities.
