With the recovery of economic growth, the performance of the banking sector has gradually warmed up in the past year. Recently, a number of A-share listed banks disclosed their performance express in 2021, and their net profits achieved double-digit growth year-on-year.
Industry insiders believe that the whole banking industry will show a good performance trend in 2021, not just individual companies. Looking forward to 2022, it is expected that the year-on-year growth rate of profits of listed banks will return to normalization.
performance forecast of 10 listed banks
As of January 15, nine A-share listed banks have disclosed their bank performance express and one bank has disclosed its performance pre increase announcement. Among the nine banks that have disclosed the performance express, except China Citic Bank Corporation Limited(601998) , the rest have achieved an increase of more than 20% of the net profit attributable to the parent.
Among them, Bank Of Jiangsu Co.Ltd(600919) net profit increased the most, and the net profit attributable to the parent increased by more than 30% year-on-year. The industry performance express shows that in 2021, the bank’s operating revenue and net profit attributable to the parent were 63.771 billion yuan and 19.694 billion yuan respectively, with a year-on-year increase of 22.58% and 30.72% respectively.
In addition, Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) and Ping An Bank Co.Ltd(000001) net profit attributable to the parent company increased by more than 25%. On January 14, Jiangsu Zhangjiagang Rural Commercial Bank Co.Ltd(002839) disclosed that the performance express showed that the operating revenue in 2021 was 4.646 billion yuan, an increase of 10.75% over the same period of the previous year; The net profit attributable to shareholders of listed companies was 1.299 billion yuan, an increase of 29.77% over the same period last year.
Ping An Bank Co.Ltd(000001) performance express shows that in 2021, the operating revenue will reach 169.383 billion yuan, a year-on-year increase of 10.3%; The net profit was 36.336 billion yuan, a year-on-year increase of 25.6%.
Followed by Industrial Bank Co.Ltd(601166) , China Merchants Bank Co.Ltd(600036) , Bank Of Qingdao Co.Ltd(002948) , Jiangsu Changshu Rural Commercial Bank Co.Ltd(601128) , Jiangsu Suzhou Rural Commercial Bank Co.Ltd(603323) , the net profit attributable to the parent company increased by 24.1%, 23.2%, 22.08%, 21.13% and 20.72% respectively year-on-year.
Among the nine banks, China Citic Bank Corporation Limited(601998) the growth rate of net profit attributable to the parent was low, with a year-on-year increase of 13.6%. In addition, Bank Of Chengdu Co.Ltd(601838) recently disclosed the announcement of performance pre increase, and it is expected that the net profit last year will increase by about 18% ~ 25% year-on-year.
In addition to net profits, the asset quality of banks has also improved. Among the nine banks that have disclosed their performance letters, the non-performing loan ratio has decreased to varying degrees, and the provision coverage has also increased.
In the secondary market, the banking sector performed well at the beginning of the year. Data show that since this year, the banking sector has ranked first in Shenwan’s 31 primary industries.
the industry expects the industry to show a good trend
According to the insiders, the net profit growth of listed banks will show a rapid growth in 2021, and the risk resistance will be strengthened. “The whole banking industry will show a good performance trend, not just individual companies.” Haitong International said.
Yan Meizhi, head of financial research in Greater China of UBS, predicts that the net profit growth of listed banks may show a rapid growth in 2021. Among them, state-owned banks may increase by more than 10%, and some joint-stock banks and urban commercial banks have a growth rate of 20% to 30%.
Yan Meizhi pointed out that in 2021, compared with 2020, bank profits rebounded strongly, “because in 2020, affected by the epidemic, banks significantly increased their provisions.” The base of Bank net profit in 2020 is low, so bank performance rebounds greatly in 2021.
In the research report, researcher Shen Juan pointed out that the fundamentals of listed banks continued to improve in 2021, and the year-on-year growth rate of profits of listed banks returned to normality in 2022. “In the first three quarters of 2021, the net profit attributable to the parent company of listed banks increased by 13.5% year-on-year. We expect that the profit growth of the whole year of 2021 will continue at a good level. Considering the return of off balance sheet financial management, the credit impairment loss may increase to a certain extent, and the profit growth will be stable and slightly reduced to 12.9%.”
Shen Juan believes that the probability of the banking sector outperforming the Shanghai Composite Index in January is high, and she is firmly optimistic about the repair market of the banking sector. There are three main reasons: first, the performance release drives the plate market; Second, the policy underpinning, macroeconomic repair is expected to increase; Third, the capital style is switched, and the defensive attribute of the banking sector is favored.
Looking forward to 2022, Yan Meizhi believes that the growth rate of bank performance may decline, but the decline is not large. It is expected that large banks will still increase by more than 6%, and some joint-stock banks and urban commercial banks may still maintain double-digit growth.
Huatai Securities Co.Ltd(601688) it is expected that in 2020, the decline of one-year LPR will lead to a slight decline in asset side yield, the reform of deposit pricing mechanism will hedge the upward pressure on deposit costs, and the interest margin is expected to narrow slightly year-on-year in 2022. Wealth management and transaction banking are expected to drive the increase of the proportion of intermediate business income in operating income.
“Listed banks strictly recognize non-performing loans, have strong risk resistance, risk events are expected to be resolved smoothly, and credit costs are expected to remain basically stable. Banking operations return to normalization. We expect that the year-on-year growth rate of profits of listed banks in 2022 is expected to reach 7.5%, slightly higher than the level in 2019 before the epidemic, and some leading banks are expected to reach more than 15%.” Huatai Securities Co.Ltd(601688) according to the above research report.
Zhou CE, an analyst at Caixin securities, said in the research report that reviewing the financial statistics of the whole year, the loan growth rate continued to decline, which is not only the tendency of financial institutions to launch early, but also the impact of weak real credit demand. Near the end of the year, the credit demand has not fully recovered, and banks have to reserve projects for the coming year, and the overall credit supply is weak. “Looking forward to the future, the liquidity is reasonable and abundant, the economy is growing steadily, the confidence of real investment is improved, the credit demand is expected to recover, the growth of credit scale is driven, and the performance of commercial banks is expected to improve steadily.”
